December 2, 2023
Makati City, the heartbeat of the Philippines' business landscape, has always been a sought-after location for residential properties. Not only is it a preferred choice for local professionals seeking proximity to their workplaces, but it also holds immense appeal for expatriates in search of a home away from home.
Condominium units in close proximity to Makati's central business districts (CBDs) present a promising prospect for investors eyeing substantial returns in the bustling rental market. As the largest central business district in the Philippines, Makati attracts a significant number of foreign nationals who contribute to the city's dynamic and diverse population.
Recent data from the Philippine Statistics Authority indicates a sustained increase in the number of foreign and multinational corporations, reaching 17,270 in early 2022, up from 13,553 in 2018. The Department of Labor and Employment's Bureau of Local Employment reported that over 50,000 expats held alien employment permits in the National Capital Region in 2022. Expatriate residential leasing, particularly in CBDs like Makati, has witnessed a notable uptick. The demand is primarily driven by professionals employed in business process outsourcing (BPO) companies, shared service centers, multilateral aid agencies, as well as logistics and manufacturing industries.
Makati's allure for foreign firms is further solidified by its investor-friendly policies, advanced infrastructure, and easy accessibility. Hosting 44 embassies and 34 consulates, Makati has become the location of choice for members of the diplomatic community, providing a home away from home for their citizens.
The rise of "global nomads," individuals who work remotely while traversing the world, has also contributed to the growing expat population in the Philippines. This community further expands the renter's market in Makati, with a preference for living in close proximity to their workplaces, willing to pay a premium for convenience.
Transitioning to the broader perspective of the residential rental market in the Philippines, particularly in urban areas like Makati, it is essential to delve into the market dynamics. This analysis is vital for various stakeholders – investors, government entities, and tenants – each benefiting from understanding the trends, opportunities, and potential risks.
In recent years, the residential rental market in the Philippines has undergone noteworthy transformations. There is a surge in demand for properties located in or near business districts, driven by the lifestyle preferences of young professionals and expatriates prioritizing accessibility to their workplaces. A notable trend is the increasing demand for fully furnished apartments and condominiums, catering to the rising popularity of transient workers and the preference for ready-to-move-in properties that offer convenience and comfort.
The digital age has ushered in a new era in real estate interactions. Online platforms have revolutionized how landlords and tenants engage, making property searching, viewing, and leasing more efficient and aligned with the lifestyle of the digital population. Demographic shifts, particularly rapid population growth and urbanization, play a significant role in shaping the residential rental market. The surge in demand for city-based residential rentals is evident in urban areas like Makati, Bonifacio Global City, and Ortigas Center, where the influx of migrants has fueled the need for urban housing.
The rental market in Makati, emblematic of the broader trends in the Philippines, continues to evolve, presenting both challenges and opportunities for investors, tenants, and policymakers alike. The city's dynamic landscape, coupled with the ever-growing demand, positions Makati as a key player in the thriving Philippine real estate sector.