View of luxury apartments in Singapore.
Leading the growth in luxury home prices, Singapore, along with Tokyo, bucked the trend of falling prime prices across the world, as prices of luxury homes within the city-state rose 11.5 percent in the first half of 2018, reported Singapore Business Review citing Knight Frank research.
“In Singapore, recovery is a consequence of rising foreign demand and high land bids by developers, which has fed through to new-build prices,” said Knight Frank international residential research head Kate Everett-Allen.
However, she noted that Singapore has implemented new property cooling measures for the residential market.
“Investors may rue the rise in property market regulations which, in many cases, will add to their bottom line in the form of purchase or disposal taxes.”
In Tokyo, luxury home prices rose 9.4 percent. Knight Frank attributed the hike to economic sentiment, the relative value of the city compared with Singapore and Hong Kong, as well as investment ahead of the 2020 Olympics.
Sitting mid-table, Beijing and Shanghai saw luxury home prices increase 7.3 percent and 3.3 percent respectively.
“China’s decision to pare back its housing subsidy programme will have an impact on mass market sales in smaller cities, but we expect luxury price growth in first-tier cities to persist,” said Everett-Allen.
Knight Frank revealed that average prime price growth across the 20 cities it tracks around the world fell 4.2 percent from six percent previously.
“With the cost of finance set to rise in a number of markets, more stringent cooling measures being imposed, and slower growth in China’s first-tier cities, lower price growth will characterize the overall results of the Index for some time to come,” added Everett-Allen.