Knight Frank reports that the global rich are driving up luxury property prices in Manila and Dubai.
Knight Frank tracked 100 markets, including the Philippine capital Manila. Prices in Manila rose 26 per cent. Dubai was second, at 15 percent, and then the Bahamas, at 15percent. Knight Frank reported that the luxury prices of New York and London have declined by 2 per cent between 2023 and now are 8 per cent and 17% lower than they were at their highest point.
Knight Frank’s global head of research, Liam Bailey, stated that as wealth portfolios began to recover in 2023, wealthy buyers looked at residential properties in the luxury markets across the globe.
Kate Everett Allen of International Residential and Country Research noted that despite the fact that “the pandemic-fueled property boom was about to end in tears, as borrowing rates hit 15-years highs”, “a much softer landing” had occurred for prices.
The commercial market is experiencing a greater downturn compared to residential real estate. This is because the trend towards working from home has increased vacancy rates while high borrowing costs have impacted the value of office buildings.
Knight Frank has found that the global investment in commercial real estate fell by 46 percent to US$698 bn. This was due to a decline from US investors.
The report added that for the very first time, industrial and logistic beat out offices to become the most-invested sector. The sector gained a share equal to one quarter of all global investments, while the market for offices shrank from 25 percent in 2022 to 22 per cent.
Agents in London said that the private investors, who were the top buyers in 2023 will increase their activity in order to take advantage of the “dislocation” occurring in the housing market in 2024.
Knight Frank announced on Wednesday that the price of luxury residential properties in 2023 rose by 3.1 per cent. This was due to double-digit increases in Manila, Dubai and other cities, which offset the declines in New York, London and elsewhere.
The property market suffered a major drop in volume due to the increase in borrowing rates, inflation, and economic uncertainty. Knight Frank says this boosted the price of luxury properties and the wealth of those who owned them as the stock market recovered.
