The Residential Index

Fourth Quarter 2018

Mixed signals from residential markets

Varied price trends were observed for luxury residential markets
in Asia Pacific in 4Q18. Of the eight featured markets, only three term given a slowing economy and the ongoing impact from
saw quarterly price growth in excess of 1.0%. Manila recorded
the strongest quarterly growth while Bangkok followed in
second spot.
Uneven sales performance
A tight policy stance and reduction in pent-up demand following
an influx of new supply in 2018, appears to have impacted
market sentiment in Shanghai. Many high-end projects in the
city didn’t receive as strong reception from buyers as anticipated
as the large supply in recent quarters has diluted demand. In
Beijing, transaction volumes of luxury apartments held relatively
stable from the previous quarter while villa sales received a
boost as the government tightened policies surrounding future
villa supply.
Buyer caution is anticipated to prevail in Singapore in the short
July’s cooling measures. Developers are expected to face strong
competition due to the significant launch pipeline which could
impact price growth. Demand in Jakarta is likely to remain
strongest for affordable units in close proximity to major transit
infrastructure and most new launches will target this segment.
In Manila, robust sales activity will continue to be supported by
a healthy local economy. However, supply slippages are likely to
persist due to a labour shortage.
Asia Pacific Residential Capital Value , 1Q08-4Q18
200
180

The primary sales market in Hong Kong showed signs of 160

1Q08 = 100

softening as more buyers took a wait-and-see approach given 140

uncertainty about the economy. The luxury segment, however, 120

showed more resilience than the mass market as cash rich
buyers still seemed willing to take advantage of opportunities 100

that arose in the very small market. Some areas of the city 80

continued to see record transaction prices being set. 08 08 09 09 10 10 11 11 12 12 13 13 14 14 15 15 16 16 17 17 18 18

2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q

The effects of July’s cooling measures are still being felt in Source: JLL (Real Estate Intelligence Service)
Singapore and this coupled with a traditional seasonal lull in
demand resulted in a reduction in transaction volumes. The Quarterly Change Yearly Change
collective sales market also remained quiet with no completed City 4Q18 vs 3Q18 4Q18 vs 4Q17
transactions since policy tightening in July. (Local Currency) (Local Currency)
New launches in the higher end segments in Bangkok continued Hong Kong 0.2% 13.1%
to be well received with high pre-sales rates being recorded. Beijing 1.3% 1.8%
The five ultra luxury projects launched achieved a combined Shanghai -3.8% -5.5%
pre-sales rate of 52% while the two luxury projects launched
Singapore 0.0% 6.1%
achieved a 37% pre-sales rate. High-end units in Manila also saw
demand hold up well supported by local and foreign high net Bangkok 1.9% 2.1%
worth individuals. Manila 3.7% 10.9%

Uncertainty likely to weigh on sentiment Jakarta -0.5% -4.5%

Housing policies in China are likely to remain tight but the Mumbai 0.0% 0.1%
government may fine-tune measures to stabilise markets Source: JLL (Real Estate Intelligence Service)
amid heightened economic uncertainty. The tight financing
environment should see developers launch more new projects
to ease cash flow pressures. Buyer sentiment in Hong Kong is
expected to soften due to headwinds from economic uncertainty
Lee Fong
and financial market volatility. More new project launches with
Director, Asia Pacific Research
more affordable pricing are anticipated as the proposed vacancy
lee.fong@ap.jll.com
tax is likely to pass in 2019.

JLL
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