Jakarta and Bali, both in Indonesia, ranked highly on real estate firm Knight Frank's new index of price growth in the world's luxury real estate markets.
The capital city of Jakarta, where prices increased 38 percent year-over-year, topped the list this year. And Bali ranked second, tying Dubai with a 20 percent increase in luxury real estate prices between 2011 and 2012.
Knight Frank explained the growth:
Jakarta benefited from continued strong GDP growth, which has stood at or above 6% for five out of the past six years and, in particular, from rapid growth in middle-class wealth. Increased access for non-resident purchasers could help sustain the trend through 2013.
In Jakarta, prices jumped from $250 per square foot to $346 per square foot. And in Bali, they went from $224 per square foot to $269 per square foot, according to Knight Frank.
While a third of the cities in the report experienced price growth in 2012, prices declined in around half of the cities analyzed in the report. Overall, the Asia-Pacific region fared well, while Europe struggled.
According to Knight Frank, the dichotomy stems from the aftermath of the financial crisis:
The search for safe haven investments has continued to propel prices higher in key global cities; some of the markets worst hit by the global financial crisis appear at long last to be recovering; and the impact of growing global wealth flows has kept governments busy in their attempts to limit price growth and deflate nascent real-estate bubbles before they explode.
Even with the upswing, Jakarta and Bali still fell outside Knight Frank's list of the 20 most expensive places to buy luxury property.
Here are the 20 cities (out of 80 analyzed by Knight Frank) where prices on luxury residential real estate rose the most in 2012:
And the markets where they decreased the most:
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