Desperate cooling measures aimed at controlling property prices in the Asia Pacific are failing to bring down the cost of homes.
Despite governments acting to stabilise prices and stamp out speculative investment, average prices across the region still rose by an average 1.5% year-on-year in the first three months of 2013, according to the CBRE Asia Luxury Residential Price Index
However, the report notes that the rate of price growth is slowing due to action by various governments.
The report adds, from the 13 major markets tracked, nine cities saw price increases ranging from 0.7% to 3% in that period.
There are growing concerns over the high cost of residential property in the Asia Pacific.
Prices are rising fastest in Mumbai (3%) and New Delhi (4%), India.
Other cities also reporting big gains include Beijing (2.9%) and Shanghai (2.6%), China, while the biggest fall was seen in Vietnam’s Ho Chi Minh City with 2.2% drop.
An increase in stamp duty was one cooling measure introduced in Shanghai and Hong Kong, China, where the number of sales has slowed. House sales are also falling back in Beijing, Shenzhen and Guangzhou.
Buyers in China, Singapore, Malaysia, India and Vietnam, have all seen lending restrictions which have forced property developers to find alternative sources of funding for their projects.
However, economic growth in the Asia Pacific is starting to pick up again with first quarter growth of 4.5% recorded year-on-year. This is up slightly from the 4.3% reported during 2012.
CBRE also compiles a luxury residential rental index which saw rents increased by 0.2% between the end of 2012 and the first quarter of 2013.
Again, there was a wide variety of winners and losers recorded in the sector with Beijing as the best performer with a 1.8% increase, quarter on quarter. The biggest loser was Mumbai, which saw an 8.8% drop in luxury property rents.
A CBRE spokesman said: “Demand from long-term investors will remain firm in the coming months but the cooling measures taking place in many markets are beginning to dampen buyer sentiment.
“Overall, prices in the luxury property market look set to hold steady or ease slightly this year.”
He explained the rental market for luxury homes is expected to remain subdued this year as multinational companies increasingly look to control costs and limit the number of expat postings – forcing rents down in many cities.