Knight Frank says that global property prices are rising in Manila and Dubai.

Knight Frank’s Liam Bailey said that wealthy buyers would target residential property on the world’s most prestigious luxury markets as their wealth portfolios recover in 2023.

Kate Everett Allen is the head of residential and country research for international. She noted that although “the pandemic fueled property boom” was “set to end in tears”, as borrowing costs reached 15-year highs, there had been a “much softer landfall” on prices.

Commercial real estate, unlike residential markets, is suffering a harder downturn. The trend of working at home pushes up the vacancy rate and high borrowing rates hit the value.

Knight Frank stated on February 28 that luxury residential real estate prices have risen by 3.1 percent, bucking a trend of declining prices. Double-digit gains were seen in Manila and Dubai to offset price declines reported in New York or London.

Inflation, rising borrowing costs, and economic insecurity hit the property markets in 2014, leading to a drop in transaction volume. Knight Frank property agents say that the rise in stock markets and the resulting increase in wealthy portfolios helped to boost the price of luxury real estate.

Knight Frank tracks 100 markets. The Philippine capital Manila topped that list with prices up 26 percent. Dubai followed at 15 and the Bahamas came in at 15 as well. Knight Frank stated in its flagship The Wealth Report that luxury prices have fallen by 2 percent in New York in 2023. Prices are now eight per cent, and seventeen per cent, below their recent highs.

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Knight Frank reports that US investors pulled back from commercial real-estate investments in the US, which caused a 46 percent drop to US$698 million.

For the first time in history, the industrial and logistics sector surpassed the offices as the most heavily invested sector. The sector won one-quarter share of all investment globally, while office market shrank to a 22.5% share in 2022 from 25.5%.

Agents based in London say that private real estate buyers, the most aggressive buyers in 2023 and 2024, are expected to increase their purchases in order to capitalize on “dislocations” within the market. REUTERS

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