KUALA LUMPUR, 5 June 2024 – In a remarkable turn of events, Asia is at the forefront of the global prime residential market recovery, with four of its cities ranking among the top five performers. According to Knight Frank’s latest edition of the Prime Global Cities Index, Manila, Tokyo, Mumbai, and Delhi have shown significant price growth, driven by robust demand and limited supply.
Dominic Heaton-Watson, Associate Director, International Residential at Knight Frank Property Hub Malaysia, highlighted Manila’s exceptional performance: “Manila leads the global charge with a staggering 26.2% annual price growth, followed by Tokyo at 12.5%. Indian cities are also showing remarkable strength, with Mumbai’s prime housing market surging 11.5% and Delhi up 10.5% year-over-year. The strong 11.1% price appreciation in Perth confirms the resilience of key Australian luxury markets – often favoured by Malaysian investors.”
The Prime Global Cities Index, which tracks luxury residential prices across 44 global cities, recorded an average annual growth rate of 4.1% in Q1 2024. This marks the strongest growth rate since Q3 2022, before interest rates surged and monetary policies tightened. Quarterly price growth also strengthened to 1.1%, up from 0.3% in Q4 2023. While still below the long-term 5
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.4% annual average, the current 4.1% yearly increase represents a notable rebound from flat growth at the end of 2022.
Enoch Khoo, Managing Director of Knight Frank Property Hub Malaysia, remarked, “Quarterly, price growth also showed signs of strengthening, with a 1.1% increase in Q1 2024, up from a 0.3% increase in the last quarter of 2023. This trend mirrors the Malaysian market, where rising prices have similarly indicated a strengthening economy.”
Christine Li, Head of Research at Knight Frank Asia-Pacific, added: “Even among Chinese Mainland’s beleaguered property markets, prime residential prices in its tier-one cities have largely remained resilient, which rose by an average of 2.8% year-on-year in the first quarter of 2024. This is in stark contrast to the mass residential segment, demonstrating the resilience of the prime segment as an asset class that is shielded by less price-sensitive buyers and lower supply. With home buying curbs easing amid lowered down payment and mortgage rates, policies gradually rolled out by the Chinese government to stabilise its wider property markets are likely to creep into the prime segment and remain supportive of price levels for the rest of 2024.”
Liam Bailey, Global Head of Research at Knight Frank, provided further insight: “The rebound in global housing markets is continuing, as evidenced by our Prime Global Cities Index reaching 4.1% annual growth. Rather than heralding a return to boom conditions, the index indicates that upward price pressures are stemming from relatively healthy demand, set against continued low supply volumes. The pivot in rates – when it comes – will encourage more vendors into the market, leading to a welcome return to liquidity in key global markets.”
As Asia continues to lead the global prime residential market recovery, it reflects the region’s economic resilience and growing appeal to international investors. The sustained demand for luxury properties, coupled with strategic economic policies, positions Asia as a pivotal player in the global real estate landscape.
Key highlights of The Prime Global Cities Index Q1 2024
- Average annual house price growth rose by 4.1% in the 12 months to March 2024, up from a 3.2% increase seen in the final quarter of 2023.
- Globally, prices are rising at their fastest rate since the third quarter of 2022.
- 78% of the markets analysed saw positive annual price growth.
- Manila leads the rankings this quarter with annual price growth of 26.2%. Manila’s robust growth can be attributed to two main factors: strong economic performance boosting consumer confidence and significant infrastructure investments in and around the city, which have heightened demand.
- In Tokyo, the early 2024 surge in house prices is due to exceptionally favourable mortgage terms offered by Japanese banks and a weaker yen, which has spurred foreign investment. Despite Japan’s overall population decline, Tokyo continues to see a net population increase due to migration from other parts of Japan.
- India’s main cities, particularly Delhi and Mumbai, are benefiting from the country’s strong economic growth, with annual GDP growth running at over 8%. This economic dynamism has significantly boosted house prices.
- While the Australian market has seen a general slowing in price growth, Perth stands out. The rebound in commodity prices, particularly in the mining sector, which is a significant part of Western Australia’s economy, has positively impacted Perth’s real estate market.
