KUALA LUMPUR: House prices in Kuala Lumpur continue on an uptrend, posting a modest 5.1 per cent year-on-year increase, despite the weaker property market condition, says Knight Frank in its Global Residential Cities Index Report for the fourth quarter 2016.

Knight Frank Malaysia Managing Director Sarkunan Subramaniam said going forward, prices of residential properties in prominent and established areas in the city, are expected to remain resilient with moderate capital appreciation.

“Transit oriented developments along the Light Rail Transit and Mass Rapid Transit routes are expected to gather pace with improved connectivity,” he said in the report launched here today.

Knight Frank, an independent global property consultancy, tracks the performance of mainstream house prices across 150 cities worldwide, 47 of which are from the Asia-Pacific region.

The report stated that global house prices rose by an average 6.6 per cent in 2016, its highest rate in three years, but, excluding Chinese cities, where the index would have increased by only 4.9 per cent in 2016. Chinese cities would have occupied the entire top ten spots had New Zealand’s Wellington (23.7 per cent) not nudged Shenzhen (23.5 per cent) out of the ranking.

Knight Frank Asia-Pacific Head of Research Nicholas Holt said the dominance of major Chinese cities at the top of the 12-month price growth rankings, has led to increased moves by policy makers to cool these markets, with tougher home purchase restrictions and tighter lending criteria.

These measures, coupled with more stringently imposed capital controls could push more capital into some of the smaller Chinese cities, some of which are suffering from significant supply overhangs, he added.

Elsewhere in the rankings, Australian cities continue to see significant price growth, buoyed by low interest and strong urbanisation rates.

But, price appreciation is expected to moderate in most of these markets in Australia throughout 2017 given tighter bank lending criteria and a slight softening of external demand. --Bernama