Date: December 9, 2023
As the Philippines steadily progresses towards the completion of its reopening efforts and the economy enters a phase of recovery, the real estate sector is gearing up for a substantial increase in demand. Government projections indicate a surge in property transactions, necessitating an elevated demand for real estate professionals, including agents, lawyers, and other industry experts.
Finance Secretary Benjamin Diokno emphasizes that the rebound will not be confined to a specific segment, encompassing both commercial and residential properties. However, he underscores the importance of adapting to the 'new normal,' considering factors such as the rise of hybrid work models and the growing popularity of flexible office spaces.
"Real estate has played a vital role in the Philippine economy, but commercial spaces, home rentals, and sales experienced a downturn during the pandemic."
“With the easing of mobility restrictions and higher economic activity, we call for the support of the private sector as we strive to exceed pre-pandemic macroeconomic targets."
Metro Manila Condo Craze: A Sign of the Times
This surge in real estate demand aligns with the observations of Dot Property Group, reflecting a notable uptick in interest in Metro Manila condos during the first half of 2022. The transition back to in-person work spurred a remarkable surge in demand, with a 17.8% increase in inquiries from the fourth quarter of 2021 to the first quarter of 2022. The momentum continued in the second quarter, witnessing a substantial 28.2% surge compared to the previous three months.
As companies resumed onsite operations in the early part of the year, many employees who had temporarily relocated during the pandemic actively sought condo units closer to their workplaces. This trend mirrors broader real estate market patterns in Metro Manila, with retail vacancy nearing pre-pandemic levels at 4.6% in the second quarter, according to Santos Knight Frank. Additionally, Leechiu Property Consultants reported a doubling of office demand in the National Capital Region from April to June.
Luxury Condo Dynamics: Pricing and Demand Insights
The Philippine housing market, particularly in Metro Manila's central business districts (CBDs), has witnessed promising signs of improvement. Global Property Guide notes a 3.93% rise in the average price of luxury condominium units in 2022. However, when adjusted for inflation, luxury property prices experienced a modest decline of 3.82% during the same period. Quarterly data indicates a positive trajectory, with house prices recording a 1.59% increase in the fourth quarter of 2022. Despite a slight real-term decline of 0.62%, the overall trend signals a rebound. Demand echoes this optimism, with pre-selling activity bouncing back and 20,000 units sold in 2022, reflecting a substantial 54% increase from the previous year.
The housing market's resurgence is poised to continue into 2023, buoyed by robust economic growth. The Philippine economy registered a notable 7.6% growth in 2022, following a 5.7% expansion in 2021. With the government anticipating a growth range of six to seven percent this year, the real estate landscape in Manila stands as a beacon of recovery and renewed potential. Investors, industry professionals, and homebuyers are well-positioned to navigate and capitalize on the unfolding opportunities in this dynamic real estate resurgence.