Hong Kong ranking slips as Manila is world’s hottest market for prime residential properties: Knight Frank
- Manila recorded the biggest year-on-year price jump among 46 global cities in the third quarter: Knight Frank
- Hong Kong’s ranking eases as ‘prime’ homes, defined as the top 5 per cent of the residential market in terms of value, saw a price drop in the 12 months to September
The Philippines’ capital Manila has overtaken Dubai to become the hottest market globally for prime residential properties in the September quarter, according to a report that ranks the world’s major cities by price appreciation recorded over the past 12 months.
The report published on Friday by property consultancy Knight Frank showed Hong Kong’s rank had fallen to the 36th spot from the 35th place in the previous quarter.
Prices of prime homes in Manila gained 21.2 per cent over the past year driven by “strong domestic and foreign investments”, taking the city to the top spot for the third quarter of 2023, according to the list, which tracks prime home prices across 46 cities around the world.
Meanwhile, Dubai, one of wealthiest cities in the United Arab Emirates (UAE), fell one place to the second spot on the list despite a 15.9 per cent year-on-year increase in prices.
Shanghai, the largest metropolis in China, with a population of more than 28 million residents, advanced two places to rank third with a 10.4 per cent jump on an annual basis.
Hong Kong’s “prime” homes – defined by Knight Frank as the top 5 per cent of the residential market in terms of value – lost 1.7 per cent of their value for the year and eased 0.6 per cent in the third quarter compared with the previous quarter.
Soaring interest rates continue to weigh on Hong Kong’s prime home market performance, said Martin Wong, director and head of research and consultancy for Greater China at Knight Frank.
Hong Kong home prices to reverse direction as rates have likely peaked: analyst
But the losses are expected to narrow with the return of overseas homebuyers, who are attracted by the easing measures announced in Hong Kong Chief Executive John Lee Ka-chiu’s latest policy address, Wong said.
Average prices rose 2.1 per cent globally in the 12-month period to September, which “confirms that global housing markets are displaying signs of stabilisation despite sharply higher mortgage rates”, the report said.
However, while 67 per cent of the cities saw prices rise over the year, only 63 per cent saw an increase from the previous quarter, the report showed. It indicated “lingering uncertainty” primarily due to the potential for further interest rate hikes, the report added.
“The improvement in average annual house price growth will be welcomed by prime market homeowners but shouldn’t be overstated,” said Liam Bailey, Knight Frank’s global head of research.
“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.”
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 rises in the medium term, Knight Frank warned.
A more sustained upswing in demand and pricing will only be achieved once rates begin to move lower, the report said but cautioned it is “unlikely to take place before mid-2024”.
