In the first quarter of 2024, Manila and Tokyo emerged as the top performers in the global prime residential market, according to a report by Knight Frank. Singapore’s prime residential sector ranked 16th worldwide, with the city-state experiencing a 5% year-on-year (y-o-y) increase in prime residential prices.
Manila led the global chart with an impressive 26.2% y-o-y rise in residential property prices in 1Q2024, compared to the same period in the previous year. Tokyo followed closely, recording a 12.5% y-o-y surge in prime housing transactions.
Other cities that made it to the top ten include Mumbai, Perth, Delhi, Seoul, Christchurch, Dubai, Los Angeles, and Madrid.
Christine Li, Head of Research at Knight Frank Asia-Pacific, highlighted that China’s easing of home-buying restrictions, including reduced downpayment requirements and lower mortgage rates, is likely to positively influence the prime residential market. She noted that government measures aimed at stabilizing China’s broader real estate sector could extend into the prime segment, supporting price levels through the rest of 2024.
Liam Bailey, Global Head of Research at Knight Frank, commented on the broader market trends, stating, “Rather than signaling a return to boom conditions, the index suggests that rising prices are driven by healthy demand against a backdrop of sustained low supply levels. As prices adjust, we anticipate more sellers entering the market, which should improve liquidity in key global markets.”
The valuation-based index tracks the movement of prime housing prices across 44 global cities. The first quarter of 2024 saw an average annual growth rate of 4.1% across these markets.
Bailey attributed Manila’s strong performance to two main factors: robust economic growth, which has bolstered consumer confidence and spending power, and significant infrastructure investments across the city, driving increased demand.
Meanwhile, Tokyo’s prime residential market also experienced strong price growth at the start of the year. This growth is attributed to favorable mortgage conditions provided by Japanese banks and a weaker yen, which has attracted international investment into Tokyo’s real estate market, according to Bailey.
Knight Frank’s Prime Global Cities Index highlighted that prime housing prices in Manila and Tokyo were among the top-performing markets in 1Q2024, based on annual growth rates.
Commenting on the performance of China’s housing sector, Li noted, “Even amid the challenges faced by the broader Chinese property market, prime residential prices in its top-tier cities have remained resilient, increasing by approximately 2.8% y-o-y in 1Q2024. This stands in stark contrast to the mass housing segment, underscoring the strength of the prime segment as an investment category, driven by less price-sensitive buyers and limited supply.”