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Has Asia's luxury home market peaked?

The Alila Bangalore Hotel and Apartments
View Pictures | UIG | Getty Images
The Alila Bangalore Hotel and Apartments

Cities in the Asia Pacific are currently experiencing the strongest growth in luxury residential prices globally, but experts say the results pale in comparison with recent years.

Out of the 23 cities that saw prices climb from March 2014 to March 2015, 12 were in Asia Pacific, Knight Frank said in a new report. On an average basis, Asia Pacific grew 10.3 percent on year during the 12-month period, compared to 8.4 percent for North America and 4.6 percent for the Middle East.

San Francisco experienced the largest price surge globally at 14.3 percent, followed by Bangalore in second place with 13.6 percent. However, Knight Frank notes that growth in the latter city arose from a much lower base compared to global peers.

Jakarta was ranked fifth with an 11.2 percent price rise and Tokyo took the seventh spot with an 8.1 percent increase. Sydney and Melbourne, ranked tenth and eleventh respectively, saw prices pop over 7 percent each.

"Although we are seeing positive momentum, Asia is slowing down overall," Nicholas Holt, head of research at Knight Frank Asia Pacific, told CNBC. For example, Jakarta, Tokyo, and Beijing were all unchanged from the December 2013-December 2014 period while Bangkok slowed by 1.4 percentage points.

Wealthy city-state Singapore experienced the biggest drop globally with luxury home prices registering a 12.6 percent fall, also unchanged from the December period and the only city to post a double-digit decline.

In Indonesia's case, a looming 5 percent tax on high-end homes is likely to overshadow recent news that foreigners will finally be able to own property.

Read MoreIndonesia's property tax delay: Sop to the rich?

"The tax issue is quite serious, and could prove to be a break in market. Jakarta has seen stellar price performance over the past 3-4 years so it's natural that it won't be able to sustain those gains," Holt noted.

Bright spots

Cities in Australia and India offer the most potential in the region, particularly Sydney and Bangalore, Knight Frank said.

Australia's property boom has been a major headache for the economy, resulting in fears of an investment bubble and prompting the International Monetary Fund to recently announce it will assess the risks posed by property speculation.

Meanwhile, India's internet technology hub is one of the fastest growing real estate markets in the country, with the number of luxury projects nearly doubling in 2014 from the previous year, according to Jones Lang Lasalle (JLL).

"The growing demand for luxury housing [in Bangalore] can be attributed to the rapid pace of urbanization, the influx of global lifestyle trends and the fast growth of service industries such as technology and financial services, which are propelling many middle-income group individuals into the high net worth bracket," JLL said in a recent note.