Knight Frank: Global property prices continue to rise in Manila and Dubai as the rich get more wealthy
Knight Frank reported on Wednesday, February 28, that luxury residential property prices rose 3.1 percent in 2023, bucking the trend for falling prices. Gains in Manila and Dubai, where double-digit increases were recorded, offset declines in New York and London.
Last year, the property market saw a dramatic drop in transactions due to a rise in borrowing costs and inflation, as well as economic uncertainty. Knight Frank, a property agent, says that this helped to support the prices of luxury homes, as well as a rise in portfolios for the wealthy, when stock markets recovered.
Knight Frank’s 100-market list includes the Philippine capital Manila at the top, where prices have risen by 26 percent. Dubai is second with a 15 percent increase, and the Bahamas are third at 15 percent. Knight Frank’s flagship The Wealth Report stated that luxury prices in New York, London, and other major cities declined by 2 percent in 2023. They are now 8 and 17 percent lower than the most recent highs, respectively.
As wealth portfolios recovered by 2023, wealthy buyers focused on residential property in luxury markets around the world, said Liam Bailey.
Kate Everett Allen, the head of international residential research and country analysis, said that while “the pandemic fuelled property boom is set to end with tears as borrowing costs reach 15-year-highs”, prices have “a much more softer landing”.
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Commercial real estate has a more severe downturn than residential, due to the trend of working from home, which drives up vacancy rates, and the high cost of borrowing, which affects the value office blocks.
Knight Frank reported that global commercial real estate investments fell 46 per cent to US$698 Billion in 2023, mainly due to a withdrawal from US investors.
It added that industrial and logistics surpassed offices as the sector with the highest investment for the first record.
In 2022, the sector accounted for a quarter of global investments. The office market fell to 22 percent from 25 percent.
The London-based agents stated that private real estate investors who were the most active buyers of 2023 are likely to increase their purchasing activity in 2024, as they look to take advantage “dislocations” in the market. REUTERS
