The projected recovery of the Philippine economy is seen to drive demand for the Metro Manila residential market, Colliers Philippines said.
“The Philippine economy is bound for rebound in 2022. We see the economic expansion supporting demand in the residential sector, whether in the pre-selling or secondary markets,”Colliers Philippines Associate Director for Research Joey Roi Bondoc said.
For this year, the government projects a seven percent to nine percent growth in gross domestic product (GDP), according to the National Economic and Development Authority (NEDA).
“While we saw initial headwinds at the start of the year, especially the spread of the Omicron variant, the gradual return of foreign professionals and turnaround in business and consumer confidence should help fuel the take-up of more residential units,”Bondoc said.
“We also see rents and prices recovering in the next 12 months. These indicators bode well for the residential market,”he added.
Colliers reported that take-up for units in the secondary market remains lackluster in the fourth quarter of 2021 due to the absence of demand from Philippine Offshore Gaming Operators (POGO) and slower take-up from expatriates and local professionals.
It added that vacancy rate in the Metro Manila secondary residential market reached 17.9 percent in the fourth quarter, higher than the 17.6 percent vacancy rate in the previous quarter.
“We expect vacancy to recede to 16.2 percent by the end of 2022, backed by the government-projected seven percent to nine percent economic recovery, rebound in office leasing and the return of expatriates to the Philippines with the easing of travel restrictions,”Colliers said.
It added that local professionals’ return to traditional offices should also raise demand for units in major business hubs and this should partly help improve vacancy.
“However, a key concern is the spread of the omicron variant which held back employers’ plans of encouraging their workers to report on site,”Colliers said.
Moreover, Colliers said it sees optimism in the residential market supported by improvement in consumer and business confidence.
It cited data from the Bangko Sentral ng Pilipinas (BSP)’s Consumer Expectation Survey in the fourth quarter, which showed that the percentage of households planning to buy properties within the next 12 months improved to 4.2 percent from 3.6 percent a year ago.
Similarly, the central bank’s Q4 2021 Business Expectation Survey showed that the overall business expectations outlook increased to 43.7 percentfrom −7.9 percent in Q3 2021.
“In our opinion, Overseas Filipino Workers (OFW) remittances will continue to be one of the primary residential demand drivers in the country,”Colliers said.