Asian Upstarts Lead the World in Luxury Real Estate
Newcomers Manila and Seoul top the global ranks for annual price gains, with erstwhile regional heavyweights Hong Kong and Singapore nowhere to be seen.
Some new entrants are entering the Asia Pacific luxury market, and the price gains they are evidencing potentially indicate that the traditional financial hubs in the region may be losing some of their hold in the HNW and UHNW spheres.
Strong Gains
A Visual Capitalist graphic released Tuesday, based on Knight Frank data, showed that Seoul, South Korea, was the fastest-growing luxury real estate market in the world in 2024, with annual prices for upscale property up by 18.4 percent.
Manila was just behind them, evidencing a 17.9 percent increase, and Tokyo was not far behind, placing fifth with a gain of 12.1 percent. The interesting thing about last year’s data is that none of the traditional financial hubs, particularly Hong Kong, Singapore, figured in the top ranks.
Up and Down
Moreover, although Seoul is a financial center, its activities mainly focus on domestic matters and markets. Manila is an up and comer in fintech and has been experiencing a strong crypto boom of late, albeit it tends to fluctuate heavily in the GFCI rankings.
Visual Capitalist said Seoul did manage to beat 100 other cities worldwide based on robust demand for luxury homes driven by «local wealth creation» and «a bump» in property development.
Hong Kong Points Down
As we hinted, recent trends in Hong Kong have been pointing in an entirely different direction. The «South China Morning Post» reported yesterday (paywall) that many of the luxury residences in the city are down almost half from their peak even though demand has significantly risen.
The reasons for that are potentially manifold, albeit hard to pin down. China’s ongoing property crisis is clearly one of the reasons, although a sluggish financial sector could share some of the blame.
Expats Unmoved
As a recent moving company indicated to finews.asia, the age of banks moving expats into the city for hefty sums seems to be something harking back to an increasingly forgotten past, with many simply shoving lump sums into bankers’ faces and asking them to arrange everything themselves.
But it could also be due to latent, unnecessary uncertainty as to what will happen related to residential property (practically all of which is leased) in the city after 2047 when the one country-two systems form of government agreed with the mainland is set to expire.
Not Getting Through
Although the government announced a statutory lease extension mechanism from now and past the abovementioned date in the middle of last year, that information may not have filtered through by the time the Knight Frank survey was conducted.
Singapore, for its part, saw steadier developments, with 2024 being a year of consolidation after the strong gains seen in 2023 and an almost double-digit rise in 2022 (collated Google search).
Strong Showing
The Middle East, however, staged a surprisingly strong showing in last year’s ranks, with Dubai, which celebrates its 20th anniversary as a financial hub this year, coming in third with price gains of 16.9 percent, followed by Riyadh, Saudia Arabia in fourth (16 percent gain).
finews.asia has extensively commented on the Mideast’s hub growth, and, indeed, buying a luxury property there looks like a secular upwards trend that will just keep on giving, at least for the next few years.