KUALA LUMPUR – Residential prices here fell an average of 0.6 per cent year-on-year in the third quarter of 2018, according to research from global property research firm Knight Frank.

In the Knight Frank Global Residential Cities Index 3Q2018 report released, Kuala Lumpur is now 129th out of 150 global cities.

The Malaysian capital joins other first-tier cities that registered overall declines such as London (-0.3 per cent), Melbourne (-1.5 per cent) and Shanghai (-0.2 per cent).

The list, ranked by annual price changes, placed Stockholm (-7 per cent), Tel Aviv (-8 per cent) and Turin (-13 per cent) at the bottom with the steepest drops.

Singapore was ranked at 28th with an 8.8 per cent increase in residential property prices while Jakarta ranked at 88th with 3.3 per cent increase.

The report attributed the price drop to “a mix of economic stagnation, high rates of new supply and affordability constraints contributing to softening prices in a number of these urban markets”.

Globally, home prices rose by 4.5 per cent on average, with China’s northwestern city of Xian showing the biggest increase in home prices at 20 per cent. Ahmedabad and Hungary follow with 19.6 per cent and 19 per cent respectively.

Prices of residential property in the Asia-Pacific region increased the most in this period at 6.2 per cent, up from 3.3 per cent a year ago, at the same time overtaking the global average increase.

Aside from Xi’an and Ahmedabad, the other Asia Pacific cities in the top 20 cities with price hikes were Hyderabad (18.6 per cent increase), Bengaluru (18.3 per cent), Hong Kong (15.8 per cent), Surat (13.2 per cent), Pune (12.6 per cent), Mumbai (11.5 per cent) and Nagoya (11.1 per cent) and Changsha (10.9 per cent).

Knight Frank Asia Pacific head of research Nicholas Holt said that while the Asia-Pacific region continues to lead the world in residential price growth this quarter, cooling measures, rising interest rates and waning buyer sentiment threaten to dethrone the region from its top spot.

“A combination of these factors will likely lead to slowing growth momentum as we head into 2019,” he said.

– Malay Mail