A recent study by Knight Frank highlights divergent trends in the prestige real estate market. While high-end residential real estate showed remarkable resilience in 2023, the commercial sector faced more complex challenges.
Luxury residential real estate was a bastion of resilience in the face of the economic challenges of 2023, recording a notable increase of 3.1%. This positive trend was driven by dynamic markets such as Manila and Dubai, as reported by real estate agency Knight Frank in its latest report, The Wealth Report, published on Wednesday January 28.
Manila, the capital of the Philippines, dominated the list of 100 markets tracked by Knight Frank, posting impressive price growth of 26%, closely followed by Dubai with an increase of 15.9%. However, performance in New York and London was more modest, with declines of 2% in 2023. Both destinations are 8% and 17% below their most recent peaks respectively.
The Bahamas (+15%) comes third, while the Algarve and Cape Town (+12.3% each) round out the top five.
In 2023, real estate markets were hit by rising borrowing costs, inflation and economic uncertainty, resulting in a notable drop in transaction volumes. This had the effect of supporting luxury property prices, while at the same time encouraging the expansion of high-net-worth portfolios thanks to recovering stock markets.
“As wealth portfolios recovered in 2023, high-net-worth buyers targeted residential real estate in luxury markets around the world,” said Liam Bailey, global head of research at Knight Frank.
A view shared by Kate Everett-Allen, head of international residential property and country research. She notes that while “the pandemic-fuelled property boom was set to end in tears as borrowing costs hit their highest level for 15 years”, prices have experienced “a much softer landing”.
Dubai, a market apart
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