The world’s fastest-growing luxury market can be found in Asia, a new report said, declaring that in terms of price growth Manila, the bustling capital of the Philippines, beats them all. The selling price of premium residences in the Asian metropolis outpaced the likes of Tokyo, Singapore and Paris at the end of 2018, the research findings from Knight Frank indicated.
According to the property consultancy firm, luxury homes in the City of Manila jumped by 11 per cent last year, the increase primarily driven by the Philippines’s consistently growing economy. Prices likewise shot up as the supply failed to meet the growing market demand, the latter thanks to the influx of foreigners that have been migrating to the Philippines in the past years.
It helped as well that Filipino migrant workers, known in the country as overseas Filipino workers (OFWs), have been snapping up property investments, and the newly-found buying confidence the Knight Frank report has credited to the booming local economy that grew by six per cent in 2018.
Basing on the Prime International Residential Index furnished by Knight Frank, Manila’s flourishing luxury home market bested Beijing, Hong Kong and Singapore as all three cities only managed to barge into the Top 50 of the index.
The Knight Frank report, however, also cautioned that while the Manila property market appears promising to investors, the luxury segment is likely headed to a slight slowdown.
“The overall growth in luxury home prices is dwindling,” local media outlet UNTV said in a related news report, citing too that Manila’s performance pales in comparison to the overall market, which registered a 21 per cent hike in the same period last year.
While the growth trajectory remains in place, industry players need to take into serious consideration that the era of ultra-low interest rates has practically ended. This is the same market stimulus that saw the real estate booming to unprecedented heights in 2008.
Knight Frank said the latest market trends suggested of slower than expected growth pace ahead. In the Asia Pacific, for instance, the segment moved up only by 2.7 per cent in 2018, down from the 4.9 per cent average growth rate seen in the previous year.
Room For Expansion
Nonetheless, the narrative in the Philippines is still in the positive side due to a host of reasons, and foremost of which is a national economy that has been expanding for 15 consecutive quarters, according to the South China Morning Post.
Manila and other key cities of the country are currently regarded as “attractive investment sites” and credit goes to the government’s solid measures that boost business confidence. The country’s massive infrastructure projects and clear-cut economic policy have been cited as factors that invite foreign investments.
Investments coming from abroad, and a big chunk forecasted to originate from China, are only expected to grow in the coming years, the same report stated.