Jakarta Is World’s Hottest Luxury Property
Market
Singaporeans Take Wait-and-See
Approach to Johor Property
Jakarta posted the largest price gains in the world, with the price of a luxury home
increasing
Where’s the hottest
luxury real estate market
in the world? Try Jakarta
for the second year in a
row.
According to Knight
Frank’s Prime Global
Cities Index, which tracks
luxury real estate markets
in 30 cities around the
world, prices for top
homes in the Indonesian
capital rose more than in
any other city, up 37.7%
at the end of 2013 from
the year before.
Liam Bailey, Knight
Frank’s global head of
residential research, cited
“very limited supply” and
“very strong” demand as
factors driving Jakarta’s
high luxury property
prices, “even if the
Indonesian economy isn’t
as strong as it was maybe
two years ago.”
It’s the second year in a
row Jakarta has topped
the list. In 2012, the city
saw its upper echelon of
homes jump 38% in price
from 2011.
The increase in Jakarta
was more than double
the price rise in secondranked Dublin (17.5%)
and Beijing (17.1%).
Ranking No. 4 and 5,
respectively, were Dubai
(17%) and Los Angeles
(14%). The brokerage
firm, which released
its quarterly update on
Tuesday, defines “prime
real estate” as homes
that were sold in the top
five percentile in terms of
value.
Meanwhile, Singapore
and Hong Kong, which
were once hot real estate
markets in Asia just three
years ago, have cooled
thanks to government
measures, such as
higher stamp duties,
intended to restrict
speculation and foreign
buying. Specifically, these
measures have “impacted
the flow of Chinese
money coming into those
markets,” Mr. Bailey said.
Those two markets saw
slight decreases in 2013 –
Singapore was down 0.8%
and Hong Kong declined
2.2%.
Among the global
financial centers, New
York ranked No. 9 (10.4%)
and London ranked No.
12 (7.5%)
Which way is the global
real estate market
heading in 2014? Look to
London, Mr. Bailey said.
“It’s the bellwether. Price
growth is strong but it’s
going down. We’re seeing
the effect of the fear of
rising interest rates,” he
said.
See the full list of the 30
cities in the Knight Frank
Prime Global Cities Index,
ranked by price increases
in last quarter of 2013
compared to the same
year-earlier period,
Knight Frank Prime Global
Cities Index
1.Jakarta 37.7%
2.Dublin 17.5%
3.Beijing 17.1%
4.Dubai 17.0%
5.Los Angeles 14.0%
6.Tel Aviv 12.7%
7.Bangkok 12.3%
8.San Francisco 10.4%
9.New York 10.4%
10.Sydney 9.3%
11.Tokyo 7.9%
12.London 7.5%
13.Shanghai 7.3%
14.Monaco 6.0%
15.Vienna 5.5%
16.Kuala Lumpur 5.5%
17.Vancouver 5.3%
18.Madrid 5.0%
19.Nairobi 4.9%
20.Miami 4.3%
21.Mumbai 3.0%
22.Moscow 2.1%
23.St Petersburg 0.6%
24.Cape Town 0.2%
25.Rome 0.0%
26.Singapore -0.8%
27.Zurich -2.0%
28.Hong Kong -2.2%
29.Paris -4.0%
30.Geneva -8.0%
A Johor project featured in a property show in Singapore
Despite the delayed
implementation of the RM1
million (S$387,000) minimum
property price threshold
for foreigners in Johor,
Singaporean buyers are
unlikely to rush in, according
to Khalil Adis, Founder of
Khalil Adis Consultancy.
He noted that Singaporeans
are used to the orderly and
uniform implementation
of policies in their home
country.
“Without a similar framework
in Malaysia and (given) the
sudden implementation in
federal controlled territories,
I suspect they would rather
wait out until the policy has
been cast in stone.
“Singaporeans do not want
to be caught in between
where they suddenly find
themselves unable to secure
loans should they purchase
properties below RM1 million.
In Iskandar, for instance, only
OCBC is willing to finance
loans for properties less than
RM1 million,” said Adis.
Moreover, buying interest
in Iskandar among
Singaporeans has cooled in
recent months, despite the
Singapore dollar racing to
a 16-year high against the
ringgit last month and the
existence of special economic
zones such as Medini, where
foreigners can purchase
properties below RM1 million
with no real property gains
tax (RPGT) up to 2020.
“I think this is due to the lack
of clarity that arose from
Malaysia’s Budget 2014.
As far as we understand,
the federal government
decides what the measures
will be (i.e. raising minimum
purchase price) but the state
has the prerogative to decide
when to implement. This is
what is causing the wait-andsee situation.
“Singaporeans now