The rich and famous in the Philippines are now even more discerning than they ever were and one can see this in the high demand for uber luxury residential homes.
Prices of these ultra posh developments in the Philippines have skyrocketed, surpassing the price growth in any other place in the world.
This, says Santos Knight Frank chairman Rick Santos, is evidence of a strong buyer appetite for luxury homes in the Philippines.
Manila’s prime residential sector had the fastest price growth across the world at 21.2 percent, overtaking Dubai, UAE; Shanghai, China; Mumbai, India and Madrid, Spain, according to SKF’s Prime Global Cities Index.
Dubai’s price growth was recorded at 15.9 percent; Shanghai at 10.4 percent; Mumbai at 6.5 percent; Madrid at 5.5 percent; Stockholm at 4.7 percent; Seoul at 4.5 percent; Sydney at 4.2 percent; Nairobi at 4.1 percent and Delhi at 4.1 percent.
“Strong investor confidence in the Philippines during the current Ferdinand R. Marcos Jr. administration has buoyed the real estate market despite rising interest rates,” Santos said in a recent briefing.
The luxury residential space, he added, is one of several sectors where there are encouraging market activities.
“Pent-up demand for prime properties, the return of the residential leasing market, and the tight supply of developments have contributed to significant price appreciation especially in central business districts,” Santos said.
Manila’s most expensive properties are priced at P600,000 to P800,000, SKF data also showed.
Since the pandemic, buyers have shown an increasing appetite for second homes, Santos also said.
“This trend is likely to continue in 2024, with local buyers acquiring leisure properties in Metro Luzon either for their end use or investment,” he said.
In all, Santos said the Philippine real estate sector is poised to conclude 2023 on a positive note.
“Post-COVID momentum continues with robust performance in both commercial and residential segments. This growth is fueled by the ongoing expansion of outsourcing and leasing activities in the country, as global inflationary pressures, cost-cutting measures, benefit the Philippine real estate market,” he said.
Colliers Philippines, for its part, said that moving forward, the Philippine economy’s growth as well as implementation of sound macroeconomic policies will support the property sector’s faster pace of recovery next year and beyond.
“The Philippine property is way past the black swan event that disrupted the market in 2020 and 2021, but we still see headwinds that continue to stifle the market’s expansion,” Colliers Philippines Director for Research Joey Roi Bondoc said.
“What’s positive is that tailwinds persist, including the Philippines being one of the fastest-growing economies in Asia; a consumption-led economic growth; and continued trickling in of investment pledges secured by the Marcos administration. Ramped up government spending, due mainly to the administration’s goal of pump-priming the economy and bolstering the country’s infrastructure backbone, should also benefit the property sector,” he added.
Office space take up to continue growth
For 2024, Colliers expects net take-up to reach 300,000 square meters, higher than the projected 220,000 square meters for 2023, which is likely to be supported by demand from traditional occupiers and IT-BPM firms.
Colliers urged office landlords to look at specific sub-locations that present development opportunities including second and third tier cities while focusing on occupants’ sustainability thrust.
In the nine months of 2023, Colliers recorded 149,500 sqm of provincial transactions, up from 145,000 sq metres posted a year ago.
“Colliers recommends that developers complete delivery schedules of their projects as we have observed increasing inquiries from outsourcing firms especially in Iloilo, Bacolod, Bulacan, and Laguna,” it said. – With Catherine Talavera