Beating obvious candidates such as Tokyo, Paris, and Singapore, the Philippine capital of Manila has now topped the list as the world's fastest-growing luxury home market. The luxury home market report was published by Knight Frank Prime International Index, which ranked the top cities based on how much prices for luxury homes have increased over the past year.
According to the report, the city of Manila experienced an increase in the prices of luxury homes by 11 percent last year. The boost came from the Philippine's continually strengthening economy and an apparent shortage of luxury homes in the country. The low supply and the increased demand from wealthy foreigners who are opting to live in the city have also contributed to the increase in prices.
Apart from Manila, the only other Southeast Asian city in the top ten of the list of 100 cities was Singapore. The report revealed that Singapore, which was ranked 7th overall, got a price increase for luxury homes of 9.1 percent last year. China's capital of Beijing ranked 25th and had an increase in prices of only 4 percent. China's capital was the highest ranked city among the mainland Chinese cities. Hong Kong ranked 47th overall with a 1.8 percent increase in luxury home prices.
Meanwhile, in the west, only 10 cities in the United States made the list. Among the top US cities that ranked in the list was Boston in 8th place. The city gained an 8.6 percent increase in luxury home prices, ahead of San Francisco at 10th place.
As reported by Knight Frank, the Philippines annual GDP, which rose by 6 percent last year, was a contributing factor in attracting more expatriates to invest in properties in Manila. Despite having ranked as the top city in the list, the overall growth in luxury home prices has apparently dwindled. Manila's price growth is far from the top performers in last year's list, which saw a 21 percent growth overall. The market's slowdown is attributed to the end of real estate low-interest rates, which boomed in 2008.
The Philippine's luxury home growth is also significantly slowing down due to the developer's renewed focus on more affordable housing. Major developers in the country are shying away from massive luxury projects simply because they predict that there is more demand in the low to medium-end markets. According to Knight Frank's senior director for research and consultancy, there are now only four luxury residential projects in the pre-selling stage in the capital city. More than 90 percent of the pre-selling residential apartments and condo unit have been sold. Last year, the luxury home market in Manila drew US$125.1 million in new investments, a drastic 35 percent drop from the investments made in 2017.
