Property analysts believe that the available supply of condominiums will soon decline in Metro Manila, which will increase residential real estate values as foreign and local buyers compete for the remaining units. Competition for high-end condominiums is arguably less noticeable because many are priced out of the market, but this may change in the near future since many offshore buyers are keen on owning properties.
Manila Surpasses Other Global Cities
Knight Frank’s study showed that Manila’s luxury home market ranked above other global cities such as Berlin, Paris, and Singapore. While it is true that competition is not as strong in this segment compared to low- and mid-end markets, prices have increased due to fewer projects among developers. Real estate companies have shifted their focus to affordable housing for the mass market.
OFWs and foreigners particularly Chinese investors make up the majority of buyers in the high-end market, aside from rich locals. In fact, Chinese nationals make up the majority of those who either buy or rent condos in Manila, particularly in the Bay Area where business activity is teeming with online gaming operations.
What Drives Demand in Manila
According to Leechiu Property Consultants, there would be a shortfall of condominiums in the NCR region by the second half of 2019. In other words, the prices you see today may not be the same during the latter months of this year. By 2020, the impact of a shortage will begin to materialize once the forecast takes place.
If you plan to have the condominium property rented out, the Bay Area region serves as a prime example of growing demand. Rental rates have increased by 80% in the last three years, which provided property owners with more flexibility on their asking prices because of the strong demand. This also became the trend in nearby cities within Metro Manila.
Demand for residential condominiums is not exclusively strong in the Bay Area. Online gaming operators have expanded quickly that many companies have begun to look into other cities such as Makati and Taguig. In fact, the most expensive development right now costs P540,000 per square meter at the Horizon Homes in Taguig.
Standalone home values also increased, but there is limited demand from foreigners since the law prohibits them from owning land in the country. Condominiums somehow circumvented this rule legally, since ownership of freehold real estate remains under the property developer.
Property investors should make up their mind quickly on where and when to invest in real estate. As prices pick up in the condominium market, it is not impossible for values to surge by a large margin between today and in the coming months. Whether you plan to buy a condominium for personal or rental purposes, choose a unit in a mixed-use development where there are plenty of facilities for business and pleasure.