Jakarta Leads Global Luxury Home Markets

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Luxury home prices in the Indonesia capital of Jakarta are up 38.1 percent from a year ago, making it the top performing luxury home market in the latest Knight Frank Prime Global Cities Index.

Overall prime property prices in the 29 cities tracked by the index slipped in the first quarter by 0.4 percent, but remained up 3.6 percent from the first quarter of 2012.

Bangkok, Miami, Dubai and Shanghai rounded out the top five best performing markets. Bangkok prices were up 26.1 percent in the last year, while Miami saw prices rise 21.1 percent, Dubai prices jumped 18.3 percent and Shanghai reported an increase of 17.4 percent in the last year.

"The measures aimed at cooling residential price growth in Jakarta and Bangkok have been less stringent than those applied across many neighbouring Asian cities, allowing new middle class wealth to fuel demand and push prime prices higher," Knight Frank said in the report. "In Miami's case, Latin American wealth is a key driver of the luxury market, with the flow of capital from Brazil, Venezuela and Argentina proving influential."

Overall, Europe remains the laggard of the major markets, recording an average fall of 2.3 percent.  

Tokyo was the worst performing market, falling 17.9 percent in the year. But Knight was quick to note that "Abenomics," the new monetary policies led by Prime Minister Shinzo Abe, has strengthened "business sentiment as well as demand for prime property.

Knight Frank added a similar asterisk to New York, which saw prices drop 9.9 percent in the index. The numbers reflect "the rush to complete sales in the final quarter of 2012 prior to the fiscal cliff which led to a markedly slower start to the year," Knight Frank said.

Although the numbers were muted for the overall global market, eight cities recorded double digit increases for the year, including Monaco, which reported a 10 percent jump in the first quarter.

"In each year since 2009, our Prime Global Cities Index, has repeatedly recorded its weakest rate of growth in the first quarter of the year," Knight Frank said in the report. "As a result, we expect stronger growth to emerge in the second quarter as buyers continue to search for luxury bricks and mortar as a way of sheltering their assets from the Eurozone's continuing turmoil and the fragile global economy."