Luxury home prices in Taipei last quarter increased 8.9 percent year-on-year, outperforming other property markets in Asia and ranking third globally, as capital repatriation and firms returning from abroad boosted real-estate and investment demand, a survey released yesterday by international property consultancy Knight Frank LLP showed.
“A mixture of economic growth, infrastructure improvements and redirected capital due to global trade tensions have propelled secondary Asian cities into the top ranking,” Knight Frank international residential research head Kate Everett-Allen said.
Taipei placed third for price growth, followed by Manila in fourth and Guangzhou in sixth on the agency’s Prime Global Cities Index, which tracks the performance of luxury residential prices in key cities worldwide on a quarterly basis.
Prime home prices last quarter increased by an average of 1.1 percent in all indexed cities, falling from 3.4 percent in the same period last year and 4.2 percent in 2017, consistent with a predicted slowdown in prime residential markets, Everett-Allen said.
The slowdown has gathered pace over the past 12 months with luxury home sales at their weakest in several years in many first-tier global cities, despite a longer-than-expected period of loose monetary policies and steady wealth creation, Knight Frank said.
A slower global economy and escalating headwinds — a US-China trade dispute, Hong Kong’s political tensions, a US presidential election next year and the Brexit conundrum — are affecting buyer sentiment, Everett-Allen said.
Taipei managed to buck the trend on the back of a stable economy, redirected capital and a liquidity-driven stock market, Knight Frank Taiwan researcher Andy Huang (黃舒衛) said.
Against that backdrop, self-occupancy and asset allocation needs picked up, allowing Taipei’s luxury home prices to inflate 8.9 percent in the third quarter from a year earlier, Huang said, adding that the performance was the third-fastest worldwide and the strongest in Asia.
Tighter international asset disclosure requirements are driving some capital to take shelter in luxury homes in Taiwan, where authorities allow some amnesty measures.
Luxury home prices are expected to stand firm due to a lack of new supply on the horizon, as local builders have focused on developing new office buildings to meet demand, Huang said.
Internationally, Moscow leads the index with prime prices growing 11 percent, thanks in part to increasing demand and the completion of a number of high-end projects in prime areas such as Ostozhenka and Tverskoy, Knight Frank said.
Seoul was the weakest performer last quarter due in part to a price cap on new homes, which is to go into effect next quarter, Knight Frank said, adding that the measure follows other regulations, such as tighter mortgage regulations and higher taxes for multiple homeowners, to help tame the South Korean market.
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