Manila clinches top spot in Q3 prime global cities index
Prime residential prices in Manila grew by 21.2%, thanks to strong domestic and foreign demand.
Manila has claimed the top spot in Knight Frank's latest edition of the Prime Global Cities Index, with a 21.2% annual rise in prime residential prices. Despite a modest 2.1% price increase this quarter, the city's performance is attributed to strong domestic and foreign investments.
While global housing markets are displaying signs of stabilisation and 67% of markets saw prices rise over the year, ongoing uncertainty over inflation and interest rate risks continues to weigh on all levels of the global housing market, including the luxury segment and is likely to limit price growth in the medium term.
With inflation edging lower, and interest rates largely held by central banks, market demand for residential property has improved in several markets, contributing to improvements in the index results. However, a more sustained upswing in demand and pricing will only be achieved once rates begin to move lower – which is unlikely to take place before mid-2024.
Liam Bailey, global head of research at Knight Frank, shares: “The improvement in average annual house price growth will be welcomed by prime market homeowners but shouldn’t be overstated. Higher rates mean we have moved into a world of lower asset price growth - and investors will need to work harder to identify opportunities for outperformance to secure target returns."
Asia-Pacific highlights of Prime Global Cities Index Q3 2023:
- Manila takes the lead: Despite a modest 2.1% price increase globally, Manila claims the top spot in the ranking with an impressive 21.2% annual rise in prices. This exceptional performance is attributed to robust domestic and foreign investments.
- Dubai and Shanghai in second and third place: Dubai, with 15.9% annual growth, has moved into second position in the ranking due to a slowing in quarterly growth from 11.6% in Q2 to 0.7% in Q3. Shanghai secures the third spot with 10.4% annual growth in the rankings.
- Significant improvement in Korea: In the Asia-Pacific region, Seoul’s annual growth significantly improved, moving the city from 39th place in Q2 to 7th place this quarter in the ranking.
- Decline in Singapore and Hong Kong: Singapore’s market has started to experience annual price declines, attributed to the impact of higher stamp duties on foreign buyers. Hong Kong continues to see declining prices, with a 0.6% drop in the quarter leading to a 1.7% annual decrease.
- Mixed picture in Australia: Australian markets deliver positive annual growth but show negative quarterly movements in Perth and Melbourne, indicating potential limits to growth in the current cycle.
Note: all data to Q3 2023, except Miami, Los Angeles and San Fransico which are as at Q2 2023
Source: All data comes from Knight Frank’s global network with the exception of Tokyo (Ken Corporation); New York (StreetEasy); Los Angeles, Miami and San Francisco (S&P CoreLogic Case-Shiller); Berlin and Frankfurt (ZIEGERT Research/ ImmobilienScout 24); Stockholm (Svensk Maklarstatistik); Toronto (Real Estate Board of Toronto); Vancouver (Vancouver Real Estate Board); Zurich and Geneva (Wüest Partner).