Hong Kong ranking slips as Manila is world’s hottest

market for prime residential properties: Knight Frank

scmp.com/business/article/3240269/hong-kong-ranking-slips-manila-worlds-hottest-market-prime-residential-
properties-knight-frank

November 3, 2023

View of residential buildings in Mid-Levels, Hong Kong. Photo: May Tse

Business

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.

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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.

This photo taken on January 29, 2019 shows a general view of the skyline of Manila. Photo: AFP

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.

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.

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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”.

Yulu Ao
Yulu Ao joined SCMP in 2022 as a business reporter. She previously covered business
trends across the Greater Bay Area with topics including financial market, healthcare,
aviation, etc. She holds a master's degree in journalism from the University of Hong Kong.
Before moving to Hong Kong, she interned in different roles at several news agencies in
mainland China.

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