The influx of expats is making a tiny boom in Philippine real estate particularly increasing the demand for luxury apartments in the Philippines, according to reports.
Real estate advisory company CB Richard Ellis Philippines study showed that sales of luxury apartments continue to go strong in spite of their exorbitant prices, thanks to their popularity with foreigners.
There has been a rise in the number of foreign companies in the country, particularly business process outsourcing companies (BPOs). This means that there are now more companies which are purchasing and leasing properties out for their employees. Most of these BPO offices are located in the central business districts such as Makati and Ortigas.
The rise in the population of expats in the Philippines has driven the demand for luxury residential condominium in the country, said Mr. Jose Luis Matti, executive director of CBRE Philippines Assets Services.
‘A luxury condominium is one of the top choices. If it’s bought for investment purposes, the chance of you being able to lease it out at a very good rate is high,’ he said.
‘A 300 square meter condo could go for around P300,000 a month in rent so if you look at that in terms of investment, if you bought one of those to lease out, your return on investment would be pretty good,’ added Matti.
Aside from the growing expat population, Matti also said that people with loads of family money, Manila’s prominent famillies, as well as families in big corporations are the main purchasers of luxury developments in the Philippines.
‘There have been a few years in the past when the market for luxury residential hasn’t been as good but I think we’ve gone past the hump and it has always been one of the better performing segments of the industry that’s why there are always high end projects,’ said Matti.
He projects a healthy demand for luxury developments in the Philippines this year, echoing the forecasts of the Asian Development Bank (ADB). According to ADB, they expect a “robust growth” in the Philippines and other emerging Asian economies. The projected growth is an average of 7 percent for the region. The ADB pointed out the strong services sector in the country which is not limited to just business process outsourcing (BPO), but also includes the financial, real estate, and distribution sectors.”
‘You can’t buy large pieces of land in Metro Manila anymore,’ Matti opinted out, ‘So the next closest thing would be a luxury residential condominium.’
There is also a projected increase the demand for traditional office spaces this year.
“We are getting more value out of every square meter of land, as well as lessening reliance on private transportation brought by developments on the residential market,” said Matti. He also explained that developing vertical housing projects “makes smarter use of the land, with proximity to one’s work office as a plus factor.”
The major developers of luxury real estate condominiums in the Philippines include Century Properties, Metro Pacific, Ayala Land, JTKC Land, and Kingdom of SA. According to Asuncion, the supply of luxury residential condominiums will remain constant.
Kaye Donald is currently practicing as a real estate consultant. She was previously connected with a large multinational real estate and property holdings company prior to building her own career as an independent real estate consultant.
Century Properties Manila is a successful name in the real estate arena. It is the company behind big real estate projects such as the Essensa East Forbes, Soho Central Private Residences, and West of Ayala.
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