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Philippines Real Estate Market Want to buy property in

Outlook in 2019: A Complete Asia?
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Posted on October 16, 2018 by Marcus Sohlberg in Property Markets & News
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Philippines has become one of the hotspots for foreign property buyers in Asia.

With favorable demographics and an increasing middle class, Metro Manila has
undoubtedly seen the biggest interest. Corporations also move elsewhere,
setting up o ces in places like Cebu and Davao, where operating costs are
lower.

In this article, I explain how Philippines property market has performed the past
years. I’ll also share my predictions for market performance in 2019.
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Topics covered in this article:

I accept that this form collects my name,
Philippine’s property market in 2017 & 2018: A throwback email and other information that may be
Manila property prices forwarded to a real estate agency or other
relevant agency
Is there a real estate bubble in the Philippines?
How will Philippines’s real estate market perform in 2019?
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Is Philippines’ real estate market at its peak? Policy of this website
How high are the rental yields in the Philippines?
What is driving the demand of real estate in the Philippines? Request Free Quotation

Philippine’s property market in 2017 & 2018:

A throwback
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Philippines real estate market has boomed in the past years, following the path
of the country’s strong economic growth, starting from 2010.
Disclaimer: We don’t o er any kind of
insurance or compensation, due to losses
Over 70,000 new o ce spaces were added to the Manila business districts in caused by the agency, developer, banks,
2017, breaking a new record. Still, the vacancy rates remained low, at around government or any other party that may be
5%. involved in the buying process.

Many Chinese companies, especially tech and gambling companies, have

outsourced operations to places like Metro Manila. There’s been a continuous
rise of Chinese investors, driving the demand for property and increasing prices.

These companies don’t only buy or rent o ce space in business areas like
Makati, but also buy residential properties for their employees. O shore gaming
rms had a big impact on the exceptionally low vacancy rates in Manila’s central
business district, despite the increase in supply.

In addition to Manila, these rms move to other cities like Cebu, having an
impact on the local real estate markets.

Manila property prices

Property prices have increased much in Manila over the years. Below you can
see the year-on-year price increase for 3-Bedroom condominiums in Makati:

2017 – 10.4%
2016 – 9.95%
2015 – 13.43%
2014 – 7.11%
2013 – 14.37%

Overall, prices increased by 5.7% on average nationally in 2017, where we saw Recent Posts
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Is there a real estate bubble in the Categories

Philippines?
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At the end of 2017, there was a growing concern that a housing bubble started City Guides
to evolve, mainly due to the increased property prices and supply. Country Guides
Interviews

However, in Q1 2018, the supply decreased signi cantly. Land Guides

Legal & Taxes
Money & Finance
According to Colliers, the number of new housing units has gone from 27,000 to Property For Sale
12,700 per quarter during this period. At the same time, the vacancy rates Property Guides
improved much during the rst two quarters of 2018. Property Management
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Almost 30,000 units (a record high) were taken up in the preselling sector.
It’s expected to cross over 60,000 by the end of 2018

The high demand is mainly driven by expats, local professionals and Chinese Search...

investors

The vacancy rate for condominiums was around 11%, while it’s expected to
remain at around 12% during coming years

The quarter-on-quarter price increase in most of Manila’s districts was more

than 2%, while the price increase in upscale areas like Fort Bonifacio and
Makati was around 2.8%

How will Philippines’s real estate market

perform in 2019?
Overall, Philippines’ real estate market looks bright for 2019, especially if we look
at places like Metro Manilla. The demand is outpacing the supply in almost all
major cities, while the o ce vacancy rate is less than 5%.

Based on recent gures, as well as previous trends, many believe that Manila
might be one of the best locations to invest in real estate in Southeast Asia.

There are few countries in the world that had a growth rate of 6-7% in the last
decade. The rapidly growing economy is driving the real estate sector, with
increasingly more Chinese investors and companies operating in the Philippines.

We also see an increased purchasing power among locals.

The o shore gaming industry is one of the key drivers of the real estate market,
both in the o ce and residential sector. In 2018, the gross gaming revenue
increased by 9.4%, which represents a ourishing industry backed by Chinese
investors and gaming companies.

Is Philippines’ real estate market at its peak?

In fair terms, no. You might wonder if the continuous price increases, that we’ve
seen for the last seven years, means that the market has already reached its
peak.

This is probably not the case, at least if you look back at the time of the Asian
Financial Crisis in 1997.

At that time, the property market went through a sharp decline. But if you
compare the current prices adjusted by in ation, the current prices are still 20%
lower. Looking historically, the market is still far from its historic peak.

How high are the rental yields in the

Philippines?
Even if prices are expected to rise at the same rate as in the last few years
(8~10%), rental yields will most likely remain at a similar level. Philippines
performs well in terms of rental yields, so it’s nothing you should worry about
too much.

In 2017 and 2018, we didn’t see a big increase in rents for residential properties,
and Colliers predicts a 1-3% increase in rents by 2020, at most.

Future supply of property in the Philippines

According to a recent report published by JLL, many well-known developers
operate in Metro Manila and other NCR cities to provide o ce and residential
space, meeting the coming demand.

According to JLL, around 2.1 million square meters of o ce space will be added
until 2020, where a majority will be dedicated to Makati, Pasig, and Taguig.

Similarly, the same report predicts an increase of 35,000 condominium units in

2019. Cities like Pasay, Taguig, Makati, and Quezon are expected to see the
highest increase in residential units.

8.600 condominium units will be provided quarterly from 2019 to 2021, while
the condominium vacancy rate will remain at around 12-13% during this time
period.

The increase in rents will stay the same with only a marginal increase until 2021.

What is driving the demand of real estate in

the Philippines?
I’ve mentioned some of the reasons why we see an increased demand of real
estate in the Philippines. Below I’ve listed additional information, speaking for an
increased demand:

1. O shore companies and outsourcing from China

With the continuous depreciation of the Peso, Philippines become more
a ordable and a lucrative market for foreign companies to take advantage of its
big English speaking workforce.

There’s an increased demand from global e-commerce companies, call centers,

and gaming rms, among others.

Note: 1 USD = 49 Pesos in Jan 2018 | One USD = 54 Pesos in Oct 2018

2. Continuous supply of exible workspace

With millions of square meters of o ce space the rents remain stable, allowing
companies and startups to expand and operate more easily.

Increased number of local and foreign high net-worth individuals

A stronger economy, a lower unemployment rate, a growing middle-and upper

class, and foreigners drive the growth of the residential property market.

3. Increased amount of Chinese buyers

An increased number of Chinese buyers contributes to the current and future
growth. According to Bloomberg, the gambling/gaming market has attracted
around 100,000 Chinese workers to the Metro Manila area since September
2016.

4. High remittances from overseas

Philippines is the third largest recipient of foreign remittances in the world.
Overseas Filipinos sent additionally USD 3 billion to their families in 2017
compared to 2016.

With a depreciating peso, and with the increase in foreign remittance, many
families now have the purchasing power to buy and invest in the residential
property market.

Summary
According to market statistics, previous trends, reports by leading real estate
agencies like Colliers and JLL, Philippines remains an attractive spot for real
estate investments in 2019.

Prices are increasing, the demand is high, and the market is growing with a
sustainable pace, which is predicted to remain the same for the coming two to
three years.

The key drivers are: increased interest from foreign companies (that need
housing for their employees), Chinese investors, an increased purchasing power
among locals, and increasingly more remittance of money from overseas.

Yields are comparatively high and it’s generally easy to do business. You also
have the option to apply for a number of long-term visas, allowing you to stay
inde nitely, with low requirements.

It’s always hard to predict the future, but with the information on hand, it seems
like Philippines will perform fairly well in 2019. If you want to know more about
investing in condos in Manila, I also recommend you to read my separate guide.

Do you plan to buy property in the

Philippines? Fill in the form below to get in
touch with an experienced agent
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This form collects your name, email and other information, so that we can send
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and why we store your data (and how you can access the data), please read our
Privacy Policy (see the link below).

I accept that this form collects my name, email and other information that
may be forwarded to a real estate agency or other relevant agency

I accept the Terms of Services and Privacy Policy of this website

Request Free Quotation

Is the form not working? Please send an email to info@asiapropertyhq.com

instead, and we will reply within 24 hours.

Disclaimer: We don’t o er any kind of insurance or compensation, due to

losses caused by the agency, developer, banks, government or any other party
that may be involved in the buying process.

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 Tags: Manila, The Philippines

About Marcus Sohlberg View all posts by Marcus Sohlberg →

Marcus Sohlberg is one of the founders at asiapropertyhq and manages the

knowledge base where we continuously post new articles.

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