Knight Frank, a leading international property consultancy, in its latest report Asia-Pacific Residential Review Index for H2 2022 cited that 14 out of 23 Asia-Pacific (APAC) cities have recorded positive annual price growth with Metro Manila ranked as the best-performing Asia-Pacific market.

Metro Manila is the best performing market in APAC, rising by 24.0% YoY in the second half of 2022, a sign of improving economic conditions. The information technology-business process management (IT-BPM) sector continues to stabilise and job creation has resulted in a boost in the demand for housing.

The recovery is broadbased, anchored by the new launches in the luxury segment. In addition, the price surge is further driven by low supply in the condominium market. Data showed that units launched throughout the year were around 60% lower than that in 2021.

Given the elevated interest rates across the board since our last update, the cautious sentiment continues to prevail in the residential markets across the Asia-Pacific (APAC) region.

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Despite the good news of Chinese Mainland ending its Zero-covid strategy and near full reopening of the economy across the region, buyers are feeling the pinch of the high mortgage rates, deteriorating economic outlook and high inflation.

Transaction volumes fell across the board, and out of the 23 cities tracked by Knight Frank, nine registered negative year-on-year (YoY) growth in the second half of 2022, which increased from just four in H1 2022. Weaker market conditions will remain in place through 2023, until there is more clarity in terms of the pace of the interest rate hikes.

Victoria Garrett, Head of Residential at Knight Frank Asia-Pacific said, “Annualised home values in the APAC region’s residential sector rose noticeably slower in 2022, decelerating to 0.4% from 5.7% six months ago, as more homebuyers are priced out by the rise in mortgage rates and an inflationary environment sparks caution. Still, the slowdown belies the underlying resilience across the region. In markets that have corrected the most, such as Australia and New Zealand, home equity has stayed positive while the lagging property cycle in emerging Southeast Asian markets is now on a strong recovery footing. Across the region, residential markets continue to be well supported by robust economic fundamentals and are well positioned to weather the ongoing uncertainty.”