Metro Manila’s luxury property prices have experienced unparalleled growth, soaring by 21.2% in the past year, surpassing global counterparts. The robust real estate market is driven by investor confidence, bolstered by positive economic forecasts for the Philippines under the current administration of Ferdinand Marcos Jr. The impressive growth outpaces major international cities, with Dubai at 15.9%, Shanghai at 10.4%, and Mumbai at 6.5%. Even cities like Madrid, Stockholm, and Seoul reported lower increases, highlighting Metro Manila’s exceptional performance.
According to Rick Santos, CEO of Santos Knight Frank (SKF), the flourishing Philippine real estate market is fueled by strong economic activities, particularly in business process outsourcing, energy, and industrial sectors. The country’s economic resilience has attracted foreign investors, primarily from Japan, the United States, and India.
Santos attributes the surge to pent-up demand resulting from the global recovery from the pandemic. The return of the residential leasing market and delayed construction during lockdowns have led to a tight supply, especially in business districts, driving property prices higher.
SKF’s data also reveals a decline in the office vacancy rate in prime buildings, reaching 17% in Q3, below the 20% average. The Philippine Economic Zone Authority’s approval of P27.3 billion in foreign investments, particularly in manufacturing and electronics, further contributes to the country’s economic vibrancy.
As geopolitical tensions impact property markets in China and Hong Kong, the Philippines emerges as a preferred destination for investors and occupiers. Santos notes a significant increase in industrial activities, with Manila’s warehouse lease rates experiencing a 30% jump, the highest in the Asia Pacific.
Looking ahead, SKF predicts a continued trend of local buyers acquiring leisure properties in Metro Luzon, driven by rising incomes and a desire for vacation spaces. The report indicates that 41% of condominium units sold in Luzon are in tourist areas like Tagaytay and Batangas, while 59% are in Cavite, Batangas, Laguna, and Pampanga.
The Philippines’ resilience in the face of global challenges positions Metro Manila as a hotspot for real estate investment, offering not only luxury living but also promising returns for both local and foreign investors.
