Hong Kong ( CNN ) -- Forget the red-hot property market of mainland China -- a new forecast says investors should be looking south . Jakarta -- Indonesia 's burgeoning capital of nearly 10 million people -- is predicted to be Asia 's top real estate market in 2013 , ahead of cities such as Hong Kong , Singapore and Sydney in `` Emerging Trends in Real Estate -- Asia Pacific 2013 , '' a real estate forecast released this week by PriceWaterhouseCoopers and the Washington D.C.-based Urban Land Institute . The recommendation to buy into Jakarta-based property may raise eyebrows , but PriceWatershouseCoopers says Indonesia 's economic turnaround over the past few years has impressed international investors . `` Interest rates and inflation are under control , and while GDP is growing at around 6.5 % annually , foreign direct investment is increasing at a much higher rateâ€ ” 39 % in the first half of this year , '' the survey said . `` Driven by increased demand from foreigners and locals alike , office rents shot up 29 % year-on-year in the third quarter , according to ( property services firm ) DTZ . '' That growth in demand helped Jakarta jump 10 places from its 2011 ranking but PwC warns the city 's real estate scene is not entirely rosy . Difficulties in finding inexpensive bank loans , trustworthy local partners and land with disputed ownership all mean `` caveat emptor '' -- buyer beware . China 's financial hub of Shanghai keeps its number two spot from last year . The PwC survey says the city 's retail property sector is heating up as investors shift away from the commercial sector , traditionally `` the bread-and-butter investment for foreign funds in China for many years . '' But PwC adds that foreigners are generally not as tempted to buy into Shanghai property as they were in the past . The major reasons : a real estate market that is already saturated , the rarity of commercial-grade investment buildings and Chinese regulators that are not as welcoming to foreign money as in years past . The tiny city-state of Singapore , traditionally a safe bet for real estate plays , comes in a close third , falling from last year 's first place . PwC credits the Lion City 's strong position as an Asian financial hub , an uninterrupted supply of real estate projects and continued demand for high-grade office space as the country attracts more employees from multinational firms . Put simply , both supply and demand for Singapore property is expected to stay strong in 2013 , PwC reports . Asia-Pacific 's Top 15 Asian Investment Prospects for 2013 . 1 . Jakarta , Indonesia . 2 . Shanghai , China . 3 . Singapore , Singapore . 4 . Sydney , Australia . 5 . Kuala Lumpur , Malaysia . 6 . Bangkok , Thailand . 7 . Beijing , China . 8 . China -- secondary cities ( Chongqing , Tianjin , Shenyang ) 9 . Taipei , Taiwan . 10 . Melbourne , Australia . 11 . Hong Kong , China . 12 . Manila , Philippines . 13 . Tokyo , Japan . 14 . Seoul , South Korea . 15 . Guangzhou , China . At number 13 , the real estate outlook for Tokyo signifies a ratings downgrade from `` generally good '' prospects to `` fair '' prospects . PwC says the ranking for Japan 's capital is surprisingly `` lackluster . '' `` Though investment potential appears good , investors have found deal flows restricted by the ongoing reluctance of local banks to clear bad debt from their balance sheets . A wide bid/ask spread has also limited transaction volumes . '' The forecast 's lowest-ranked city for real estate investment in 2013 is Osaka and ranks at the bottom in most survey categories , from investment and development prospects to office buy/sell recommendations . One major reason is a glut of new office space that is still being completed . At the same time , PwC says `` in small regional cities such as Osaka , investors simply do not know where the bottom is because of uncertain demand . '' The silver lining is that Osaka 's four-year oversupply of office space is coming to an end , PwC says .
Indonesia 's capital Jakarta is predicted to be Asia 's top real estate market in 2015 . With increasing GDP and foreign investment , Jakarta jumped up five places since 2011 . Singapore got bumped to third place , from first place last year . Japan 's Osaka is the forecast 's lowest - ranked market for real estate prices next year .