Prime residential land development prices across Asia-Pacific appreciated by an average of 3 percent during the second half of 2015, according to real estate firm Knight Frank.
Its Prime Asia Development Land Index for H2 2015 released today, showed that prices of residential sites in the region appreciated 3.0 percent in H2 2015, up from the 1.2 percent seen in the previous six months. On the other hand the price growth of office land slowed to 1.5 percent from 3.6 percent.
The Index derives the price of prime residential (apartment or condominium) and commercial (office) development land in 13 major cities across Asia.
The second half of 2015 witnessed development land investment volumes in Asia rise by 14.1 percent year-on-year. Cross-border volumes increased by 55.3 percent, driven by intra-Asian investment flows. China bought almost two times more land in the rest of Asia.
While the average price of a piece of development land has been climbing steadily since mid-2012, the average land size has been shrinking.
In Indonesia, the government’s efforts to tackle tax evasion is discouraging big-ticket purchases.
Nicholas Holt, Head of Research for Asia-Pacific, said: “The confluence of easing construction costs and rising residential prices and office rents propelled Phnom Penh’s prime land prices upwards. Although the growth rates in H2 2015 moderated slightly from the previous six months, they nonetheless were among the fastest in the region.
“Tokyo’s prime residential land index recorded the fastest growth among the cities tracked in H2 2015 – it is also the only market that outperformed Phnom Penh. With Japan joining the negative interest rate club, there could be more yield compression and price appreciation.”
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