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Luxury home prices in select Asian cities are soaring, bucking a downward trend in more established markets including New York and London.
Prime property prices — defined as the top 5% of the market — fell more than 2% in New York and London in the first quarter compared to the same period a year ago, according to real estate consultancy Knight Frank. Hong Kong, Frankfurt and Berlin also posted declines. But in Manila, Tokyo and Mumbai, luxury home prices surged, gaining 27%, 13% and 12%, respectively.
Higher borrowing costs and recession fears have hampered some high-end property markets in the U.S. and Europe. But globally, prime real estate prices have bounced back this year amid strong economic growth and demand from wealthy investors, posting average annual growth of 4% in the 44 cities analyzed in the report.
Housing prices have soared in Manila, with the overall economy in the Philippines growing at the strongest rate in all of Southeast Asia. In Tokyo, a weaker yen and lower borrowing costs have boosted demand from foreign investors. And in Mumbai, luxury housing growth has been in line with India’s booming economy, which is expected to become the world’s top contributor to global GDP growth by 2028.
Knight Frank’s prime property posted zero growth at the end of 2022, as higher interest rates cooled demand. But now, 78% of markets are seeing annual price growth. With those recent gains, Knight Frank’s prime property index is inching closer to its long-term annual growth rate of 5.4%.
“Rather than heralding a return to boom conditions, the index indicates that upwards price pressures are stemming from relatively healthy demand, set against continued low supply volumes,” said Liam Bailey, Knight Frank’s global head of research.
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Alice Kantor, Bloomberg , 2024-05-24 21:16:17
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