ASIA-PACIFIC: The luxury real estate market across the Asia-Pacific region is showing impressive strength, particularly in Tokyo and Seoul, according to Knight Frank’s latest Prime Global Cities Index for Q4 2024 featured in a recent Real Estate Asia article. The region has seen notable growth in prime residential prices, defying global economic uncertainties and political challenges.
Tokyo’s resurgence amid economic challenges
Tokyo’s prime residential market has undergone a remarkable resurgence, experiencing a robust 10.6% growth in Q4 2024 after a dip in the previous quarter. This impressive performance comes despite Japan raising interest rates to their highest level in 17 years. The weakened yen continues to attract foreign buyers, making Tokyo’s luxury market an attractive investment opportunity. Compared to other global cities, Tokyo remains relatively affordable, a significant draw for international investors seeking value. As a result, the outlook for Tokyo’s luxury real estate market remains optimistic, with predictions for a 3-5% price increase in the year ahead.
Liam Bailey, Global Head of Research at Knight Frank, explains the complex dynamics in play: “The path to lower rates has become more complex over recent months as developed economy inflation refuses to fall as policymakers would like. However, with most commentators expecting further cuts in 2025, this will be the factor that unlocks higher house price growth this year.”
Seoul’s strong performance despite uncertainty
Seoul has emerged as one of the standout performers in 2024, with its luxury real estate market recording a staggering 18.4% annual price growth, a sharp rise from just 4.6% in Q3. Despite political uncertainties in South Korea, demand for high-end properties has remained resilient, with luxury apartments dominating sales. In fact, 53.8% of transactions in 2024 involved properties worth over 900 million won, highlighting the strong appetite for luxury living in the city.
Christine Li, head of research at Knight Frank Asia-Pacific, attributes the strength of both Tokyo and Seoul’s markets to local market fundamentals and policy decisions. “Sustained demand from high-net-worth individuals and relative affordability compared to other global cities have supported strong price growth,” Li said. Looking ahead, she remains cautiously optimistic about the future, with Asia-Pacific cities poised to continue driving long-term capital appreciation in the luxury real estate sector.
Regional trends and broader market outlook
While Tokyo and Seoul have led the charge, other Asia-Pacific cities, including Manila, Singapore, and those in Australia, continue to play significant roles in the luxury real estate market. Manila, for instance, saw strong growth throughout 2024 but experienced a cooling period in Q4 with a 7.6% drop in prices. Meanwhile, Singapore and Australian cities remain attractive to investors for their stability and promising long-term returns.
The Asia-Pacific region’s luxury real estate market shows no signs of slowing down, with Tokyo and Seoul at the forefront of growth. Despite global economic challenges, these cities continue to demonstrate resilience, drawing international investors seeking value and long-term capital appreciation. As the year progresses, the outlook for the luxury real estate sector remains promising, especially in the Asia-Pacific region.