Global Wealth Drives Dubai, Manila Luxury Property Prices Skyward

Global Wealth Drives Dubai, Manila Luxury Property Prices Skyward

28 Feb, 2024

Global Wealth Drives Dubai, Manila Luxury Property Prices Skyward

Luxury residential property markets experienced a surprising surge amidst a backdrop of falling prices in 2023, with London seeing a notable 3.1% increase. This positive trend was primarily driven by substantial gains in cities like Manila and Dubai, despite downturns witnessed in major hubs such as New York and London, according to Knight Frank's latest report.

The past year was marked by increased borrowing costs, inflationary pressures, and economic uncertainties, factors that led to a notable decline in transaction volumes across property markets globally. However, these challenges seemed to bolster luxury property prices, buoyed by the resurgence of wealthy individuals' investment portfolios as stock markets rebounded.

Manila emerged as the top-performing market among the 100 cities tracked by Knight Frank, with a remarkable 26% surge in prices, closely followed by Dubai and the Bahamas, both witnessing 15% increases. Conversely, luxury property prices in New York and London experienced declines of 2%, with respective drops of 8% and 17% from their recent peaks, as highlighted in Knight Frank's flagship publication, The Wealth Report.

Commenting on these market dynamics, Liam Bailey, Knight Frank's Global Head of Research, noted the renewed interest of affluent buyers in luxury residential properties across the globe. Meanwhile, Kate Everett-Allen, Head of International Residential and Country Research, observed a more subdued correction in prices compared to initial predictions, attributing it to various factors including borrowing costs and market resilience.

In contrast to the residential sector, commercial real estate faces tougher times, grappling with increasing vacancy rates fueled by the remote work trend and elevated borrowing costs impacting office property values. Knight Frank's findings indicate a significant 46% decline in global commercial real estate investment in 2023, with industrial and logistics sectors outperforming offices for the first time in history.

Looking ahead, Knight Frank anticipates increased activity from private real estate investors in 2024, seizing opportunities amid market dislocations, signaling a potential shift in investment trends in the coming years.

 

 


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