In a global market where even in developed countries house prices are low and will continue to be depressed, the Philippine market powers on.
Housing Demand Remains Strong – CBRE
MANILA, Philippines — The growing demand for housing remains strong with the expansion of multi-national companies and the inflow of more outsourcing and off-shoring companies, according to CBRE Philippines.
Expatriate population is still growing as there has been no let up in the entry and expansion of outsourcing and off shoring companies.
CBRE said the expansion of multinational companies due to the favorable macroeconomic situation is likewise contributing to the inflow of expatriates. Because of the consistent growth in expatriate population, demand for housing remains strong.
While investor demand has been increasing, transactions continue to be concentrated on leases
as supply of luxury condominiums remains tight. In addition, luxury condominiums are facing strong competition from newer Grade A condominiums.
Demand for units at the Pacific Plaza Towers was also affected by the adjacent construction which is blocking the view of several of its units. Capital values of luxury condominiums however were maintained in the first quarter of the year.
Newer Grade A buildings and newly-renovated houses in luxury condominiums are seen as an alternative by expatriates to luxury condominium.
Because of leasing competition, rents were maintained in the first quarter of 2012. Unit owners are also wary of increasing rents as they are aware of the limits on expatriate housing budgets.
In the past, rents have been increasing but the budgets of expatriates have remained the same.
However, the tight market supply situation is seen to ease towards the close of the year due to a turnover of new supply.
In Makati, there are two upcoming luxury residential condominiums. Raffles Residences is set for turnover this year which will add 220 luxury condominium units.
Discovery Primea will add 90 luxury condominium units upon its completion in 2013. On the other hand, in Fort Bonifacio, 96 luxury condominium units are expected to be added in the market supply by 2014.
Expatriate population is continuously growing which spurs the demand for luxury condominium units. In the succeeding quarters, prices of luxury condominium units are expected to sustain its current levels as owners will hold on to the value of their units given the favorable prospects in the luxury residential market.
Rents are expected to remain stable due to the tight market supply which will only ease upon the turnover of Raffles Residences in the last quarter of the year.
Landlords are also anticipated to maintain the lease rates of their units as they opt to be on a wait and see attitude. Demand will still be supported by the growth in the outsourcing and off shoring industry and the expansion of multinational companies.