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Demographic Trends for Rental Market Opportunities: A Comparative Study with a Focus in the Manila Real Estate Scene


Date: April 12, 2024

When considering moving to Manila or investing in rental properties there, it’s important to understand the demographic landscape not only of the Philippines but also of other countries to see how Manila stands in the global context. The median age of a population is a crucial factor influencing rental markets. Younger populations might indicate a higher demand for rental units due to a growing workforce and urban migration. Here, we compare the median age of the Philippines with other countries to better understand potential rental market dynamics.

Demographic Trends and Their Impact on Rental Markets Across Various Countries

  • The demographic trends in the Philippines, particularly in Manila, have a profound impact on its rental markets, shaped largely by its notably youthful population. With a median age of 24.7, the Philippines hosts one of the youngest demographics globally. This youthful vigor is a pivotal driver in the flourishing rental market within Manila, an urban hub attracting an influx of young professionals and families seeking opportunities and modern living accommodations.

  • Manila’s rental market is vibrant and continually expanding, catering predominantly to the needs of its young residents. These dynamics are not only boosting residential property developments but are also influencing the types of properties in demand. Smaller, more affordable rental units are popular among single young professionals, while larger apartments and condominiums cater to young families looking for child-friendly environments close to schools and recreational areas. This demographic foundation contrasts with other countries, where the rental market dynamics are influenced by older median ages and different societal structures. For instance, in nearby Southeast Asian countries like Indonesia and Malaysia, the median ages are 29.6 and 30.3 respectively, indicating a gradual shift towards a more mature population. This shift is reflected in their rental markets, which show a mixed demand for family-sized homes and more compact living spaces for younger individuals.

  • Further afield, the rental market in countries like the USA and Japan, with median ages of 37.9 and 48.7 respectively, presents a different set of challenges and opportunities. In the USA, urban centers like New York and San Francisco continue to see high rental demand due to ongoing urbanization and job opportunities despite a more mature population. Conversely, Japan's older demographic has heightened the demand for senior living accommodations while maintaining a steady market for traditional rentals in metropolitan areas like Tokyo. The youthful demographic of the Philippines, especially in Manila, significantly shapes its rental market, making it a dynamic and appealing landscape for real estate investment and development. This situation presents unique opportunities compared to markets in older demographics, where different factors come into play.

Implications for Manila’s Rental Market

  • The youthful demographic profile of the Philippines indicates a robust and sustained demand for rental properties in Manila. This demand is driven primarily by internal migration patterns, wherein young adults relocate from provincial areas to the capital city to pursue educational and employment opportunities. Additionally, Manila's burgeoning BPO (Business Process Outsourcing) and IT industries are significant attractors for young professionals not only from within the country but also from neighboring regions. This influx of a young, dynamic workforce has transformed Manila into a prime location for rental investments. As these sectors continue to expand, the demand for conveniently located, affordable rental housing is expected to rise, making Manila an even more attractive market for real estate investors.

Understanding the demographics of a region is essential for both investors and renters, as it provides significant insights into the nature and potential of the real estate market. The Philippines, with its relatively younger median age compared to other countries, presents a unique scenario that may result in a higher and more sustained demand for rental units, particularly in urban areas like Manila. This demographic trend suggests a vibrant, youthful population that might prefer renting over buying, enhancing opportunities for rental property investments.

For potential investors in rental properties, Manila offers a promising landscape. By evaluating the city in comparison to other regions with different median ages, investors can gain a deeper understanding of the dynamics that influence the rental market. Such comparisons help in forecasting trends and preparing for future demands. Furthermore, understanding these demographic differences can aid in making strategic decisions about where and when to invest, allowing for the maximization of returns on investments in the housing sector of the area. Thus, a thorough demographic analysis is not merely beneficial but critical in navigating the complexities of the real estate market and capitalizing on investment opportunities in Manila and similar urban settings.




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