Manila leads Knight Frank’s Prime International Residential Index - Wealth Report 2019

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Thu, March 07

Manila leads Knight Frank’s Prime International Residential Index - Wealth Report 2019

"Manila leads the rankings (+11%). A lack of supply and the Philippines’ thriving economy has motivated buyers," Knight Frank

Supplied: Horizon Homes

With views of Manila Bay, Laguna de Bay and the mountains of Sierra Madre, the penthouse of Shangri-La at The Fort is for sale by Santos Knight Frank.

The Wealth Report 2019 launched today by Knight Frank, reveals the results of its Prime International Residential Index (PIRI 100). The index, which tracks the movement of luxury residential prices in the world’s top 100 city and second home markets between December 2017 and December 2018 reveals:

At a glance:

Manila leads the rankings (+11%). A lack of supply and the Philippines’ thriving economy has motivated buyers
The index witnessed its lowest rate of annual growth since 2012 with prices rising on average by 1.3%
European cities are still performing strongly (Edinburgh +10.6%, Berlin +10.5% and Munich 10.0%), while cities across Greater China continue to slide
Key global hubs including New York (-2.5%), London (-4.4%) and Dubai (-3.4%) find themselves in negative territory

Related reading: Knight Frank launches 2019 Wealth Report

Kate Everett-Allen, head of international residential research at Knight Frank, said: “Manila tops the PIRI 100 with prices rising by 11%. However, its performance needs to be put into perspective. In the past 12 years that we have been compiling the index, the top-performing market has yet to record annual growth below 21%. This is a breakaway from the norm.

“A year ago, 11 cities registered double-digit annual growth but in 2018, only five fell into this bracket, three of which are in Europe. Burgeoning rental demand, limited supply and, in most cases, buoyant local economies have seen annual price growth in Edinburgh, Berlin and Munich rise above 10%.”

Knight Frank’s PIRI 100 top 10 performing markets:

% Change (Dec 2017 to Dec 2018)

Manila 11.1%
Edinburgh 10.6%
Berlin 10.5%
Munich 10.0%
Buenos Aires 10.0%
Mexico City 9.5%
Singapore 9.1%
Boston 8.6%
Madrid 8.1%
San Francisco 7.8%

Source: Knight Frank

Knight Frank’s analysis of global property markets also explores how much US$1m can buy in 20 key cities around the world (the table below highlights the top 10).

Liam Bailey, global head of research at Knight Frank said: “Monaco continues to be the most expensive city in which to buy luxury residential property. US$1m buys just 16 square metres of accommodation here, which is the equivalent of a bedroom.

Click here to download the Knight Frank Wealth Report 2019

“However, with prices falling and a weaker pound in London, US$1m can now by you an extra three square metres compared to a year ago. Whilst this might not sound like much, the prime London market currently offers a once in a decade buying opportunity.”

Taimur Khan, Research Manager at Knight Frank Middle East added: “Despite Dubai’s residential market having experienced headwinds in recent years, driven by lower oil prices, global economic uncertainty, the stronger US dollar (which has fed through to the dollar-pegged dirham) and the introduction of stringent mortgage regulations, we have seen substantial international investment in Dubai continue. In the first nine months of 2018 alone we have seen over 142 nationalities invest in Dubai’s market with the top 10 foreign investors hailing from countries such as India, the United Kingdom, Pakistan and China.”

This is driven by the city’s strong showing in The Mercer Quality of Living Survey, the Economist Intelligence Unit’s Global Liveability Ranking and Lonely Planet’s eponymous cool neighbourhood listing.

More so given Dubai relative value, offering 143 square metres of property for US$1m compared to the likes of New York and London’s 31 or Singapore’s 36 square metres, it is not surprising that we are observing investors acquiring Dubai residential assets as part of their portfolio, alongside their pied-à-terre in New York, a home in London for their children’s education or a second home in the south of France.”

The square metres of luxury property US$1m will buy around the world: