Luxury residential price growth in Manila now faster than in Dubai

PRICES of luxury residential units in Metro Manila grew by 21.2% this year, the fastest in the world, according to Knight Frank’s Prime Global Cities Index.

Rick Santos, chairman and chief executive officer of Santos Knight Frank, said investor confidence in the Philippines under the Marcos administration has lifted the real estate market despite high interest rates.

“The luxury residential space is one of several sectors where we’re seeing encouraging market activity. Pent-up demand for prime properties, the return of the residential leasing market, and the tight supply of developments have contributed to significant price appreciation especially in central business districts,” he said in a statement.

Knight Frank’s Prime Global Cities Index showed prime residential prices in Metro Manila surged by 21.2% year on year, and by 19% in the last six months.

This is faster than Dubai, where luxury residential prices increased by 15.9% in the 12-month period and 12.3% in the six-month period.

In Shanghai, prices jumped 10.4% in the 12-month period while prices went up by 6.5% in Mumbai and 5.5% in Madrid.

Prices have not been dampened by the Philippine central bank’s aggressive tightening campaign that brought interest rates to a 16-year high.

According to Santos Knight Frank data, the most expensive residential project in Metro Manila is Banyan Tree Residences by TransAsia at P800,000 per square meter (sq.m.). Balmori Suites by Rockwell Land is the second-most expensive at P600,000 per sq.m.

At the same time, Santos Knight Frank said local buyers are expected to continue looking for second homes, mostly in leisure properties in Metro Luzon.

As of the third quarter, 41% of condominium units sold in Luzon were leisure developments mostly in tourist destinations such as Tagaytay, and Batangas.

The remaining 59% were traditional condominium units in urban areas in Luzon.