KL property price index up 0.7%, says Knight Frank


Kuala Lumpur’s (KL) property price index increased slightly by 0.7% year-on-year in the third quarter ended Sept 30, 2018 (3Q18).

Global property consulting firm Knight Frank LLP’s Prime Global Cities Index 3Q18 ranked KL at 29 out of 43 cities, with a 0.4% increase and 1.5% increase in house prices for the last three months and six months respectively.

The index increased by 2.7% in the year to September 2018, which is its weakest performance in annual terms for almost six years.

Singapore leads the index with prime prices up 13% over the 12-month period, driven by the limited availability of prime properties and a strong market outlook in the first half of 2018.

Hong Kong and Singapore, Asia’s two premier cities, have traded places last year.

Knight Frank said both cities saw cooling measures introduced over the summer months and, although the rate of annual price growth in Hong Kong has already slowed to 5.5%, Singapore may not be far behind with its quarterly growth weakening to 1.7% in 3Q18.

Knight Frank Asia-Pacific head of research Nicholas Holt said prime residential markets continued to slow in Asia Pacific in 3Q18, with 13 of 17 regional markets seeing growth decelerate in the previous quarter.

“Rising interest rates, cooling measures and worsening prospects for global growth are all contributing factors to this region’s prime market slowdown.

“While pockets of outperformance remain, these growing headwinds are likely to ensure that sentiment in many prime cities residential markets remains muted towards the end of the year, he said in a statement.

Europe’s performance is mixed compared to a year ago. While some European cities including Edinburgh (Britain) and Madrid (Spain) are still performing strongly, cities like Berlin (Germany) and Paris (France) have swapped spectacular for steady.

Meanwhile, growth remains in the negative territory for a few cities including London (Britain) and Dublin (Ireland).

Knight Frank international residential research partner Kate Everett-Allen said 2018 marks a watershed for the index as the overall narrative of lower growth has materialised.

“The rate of growth has declined for three consecutive quarters and has now reached its lowest rate since 4Q12.

“A combination of uncertainty surrounding Brexit, rising interest rates across major economies, a tighter regulatory environment and the remnants of high supply in some markets are impinging on price growth,” she added.

The index’s headline figure of 2.7% growth conceals significant variations both within continents and even within countries.

In Canada, for example, Toronto (8.5%) continues to see prime prices rise in its exclusive areas of Rosedale and Yorkville. Vancouver (-11.2%), however, sits at the bottom of the rankings as upmarket areas such as West Vancouver have seen a marked slowdown in sales and prices as a result of the raft of measures introduced in February’s budget.

Meanwhile, Auckland has made its debut to Knight Frank’s prime index for the first time in 3Q18.