The Philippine capital, Metro Manila, has taken the prime spot as the premier destination for property investors, emerging as the top city globally in terms of property value appreciation in the third quarter (Q3) of 2023.

According to a report by the London-based real estate consultancy, Knight Frank, Manila has demonstrated a 21.2 percent annual rise in prime residential prices, surpassing even Dubai, one of the wealthiest cities in the world.

The study, covering 46 markets in the Knight Frank Prime Global Cities Index for the 12-month period up to September 2023, revealed that average annual prices experienced a 2.1 percent increase. This growth rate, the strongest since Q3 2022, underscores the positive trend, with 67 percent of cities witnessing annual growth, signaling stabilization in global housing markets.

Despite prevailing uncertainty regarding inflation, the report from Knight Frank indicates that "the recovery in annual pricing confirms that global housing markets are displaying signs of stabilization, despite sharply higher mortgage rates."

For Manila, the key factors contributing to its status as a residential property market hotspot include robust domestic and foreign investments. Knight Frank noted, "Despite a modest 2.1 percent price increase this quarter, Manila claimed the top spot in our ranking with a 21.2 percent annual rise in prices. Manila’s performance is attributed to strong domestic and foreign investments.”

The city's performance in Q3 surpassed its Q2 record, where it secured the third spot with a 19.9 percent increase. This was lower than Tokyo, Japan, which recorded a 26.2 percent rise, and Dubai with an impressive 48.8 percent.

This shift in rankings underscores Manila's resilience and attractiveness for property investors, positioning it as a global leader in property value appreciation.

Dubai, however, slipped to the second position in the latest rankings, with a growth rate of 15.9 percent. Simultaneously, Tokyo was displaced by Shanghai, China, which recorded a growth rate of 10.4 percent.

According to Knight Frank's outlook, with inflation edging lower and interest rates largely held by central banks, market demand for residential property has improved in several markets, contributing to improvements in its index results.

The report noted, "That said, this revival in demand is fragile and could be pushed off course if inflation surprises on the upside. A more sustained upswing in demand and pricing will only be achieved once rates begin to move lower – which is unlikely to take place before mid-2024."