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Lamudi Philippines looks back to 2015 and see what insights we can learn from the last 12 months
It goes without saying that 2015 will eventually look to be quite a good year for Philippine real estate. Although condo sales were not on par with what was recorded in 2012 (considered a banner year for Metro Manila’s condo market), other segments of the industry are posting stellar growth, particularly houses, door apartments, residential lots, and office spaces. The year is marked by many township projects sprouting not just within Metro Manila but also in key cities outside the capital. While we look forward for another spectacular year, we at Lamudi looks back to 2015 to see what key insights we could glean from the last 12 months.
1. Las Piñas condos, on average, are way cheaper
Averaging Php49,849 per square meter, buying a condo in Las Piñas is likely to be cheaper than anywhere else in the metro. This is in stark contrast with the average price in Makati, the country’s priciest condo market, were condo units have average selling prices of Php139,012 per sqm.
This means that a 60-sqm condo in Las Piñas will set a buyer back Php2.99 million, while the same in Makati will cost Php8.34 million.
2. Muntinlupa–Cavite Expressway opened
The Aquino administration’s first public–private partnership (PPP) project, Muntinlupa–Cavite Expressway (MCX), opened in July, which effectively cut travel time between southern Metro Manila and Cavite by an average of 45 minutes, providing quick and easy access to the major real estate developments in the Cavite, Las Piñas, and Muntinlupa areas.
3. More than half of listed Makati houses are worth more than Php100 million
It goes without saying that Makati is the Philippines’ priciest city to buy any type of real estate. In fact, Lamudi data shows that 59 percent of all listed properties in the city in the first quarter of 2015—most of them in swanky neighborhoods and exclusive communities—have selling prices of more than Php100 million.
4. Cebu is most expensive city outside Metro Manila
In Cebu City, half of all listed houses for sale are priced Php8.5 million and up, making it the most expensive housing market outside Metro Manila. In fact, some homes in the Queen City of the South are fetching as high as Php150 million, rivaling opulent houses in Ayala Alabang and San Juan’s Greenhills Village.
5. Warehousing and distribution will be big in 2016
JLL Philippines’ Lindsay Orr observes that there is a huge demand for properties in the warehousing and distribution sector in the Philippines. This is attributed mainly to the rise in e-commerce. However, he noted one problem for the local property market is the limited supply that is suitable for investors.
6. How much salary do you need to afford a condo in Metro Manila?
To afford a 60-sqm condo in Metro Manila, a buyer needs a monthly salary of Php128,323, according to Lamudi’s calculation. This assumes that the buyer spends not more than 30 percent of his or her monthly income on housing loan payment (including principal and interest) and makes a 20 percent down-payment on the property. The average price of condos in Metro Manila is Php90,633 per sqm.
7. Megaworld launched its 20th township
Andrew Tan-led Megaworld Corp. launched five new townships in 2015, including its 20th to date—a still-unnamed township in San Fernando, Pampanga. The other townships include Sta. Barbara Heights (Sta. Barbara, Iloilo), The Upper East and Northill Gateway (both in Bacolod, Negros Occidental), Westside City (Bay City, Parañaque).
8. Houses still popular among property buyers
Homebuyers by a huge margin are still researching about houses or landed properties online. About a quarter of all searches for for-sale properties conducted in Lamudi from January to June of 2015 involved houses, compared to just 2.28 percent for condos.
9. BSP to actively monitor real estate prices
The Bangko Sentral ng Pilipinas (BSP) is preparing to launch a residential real estate price index (RRPI) that aims to track residential property prices in Metro Manila and nearby provinces, and to monitor banks’ exposure to the real estate industry.
According to the BSP, the RRPI, which will include information on costs of construction materials and types of houses being built, will help detect the formation of an impending housing bubble so that preventive actions can be taken.
10. Average families hard-pressed to afford a home
Based on Metro Manila’s median house price of Php8.8 million, an average Filipino family with an annual household income of Php273,000 (according to data from the 2012 Family Income and Expenditure Survey) will need 32.25 times of their annual income in order to afford a home in Metro Manila. City-wise, Caloocan offers the most affordable homes: median home price here (Php787,750) is 2.88 times of the annual household income.
11. Quezon City most popular city among online property-hunters
Metro Manila’s largest and most populous city had the greatest volume of online search traffic, according to Lamudi’s onsite data for January to June 2015. Search volume for the city grew, on average, 22 percent per month during the same period.
12. Metro Manila’s condos are getting smaller
Lamudi’s listings data shows that 42 and 41 percent of Metro Manila’s for-sale and for-rent condos have floor sizes measuring 50 sqm or smaller—a finding corroborated by a research conducted by Colliers International. According to its 2014 fourth quarter report, of the more than 30,000 preselling condo units expected to be delivered in the Makati CBD, Fort Bonifacio, Rockwell Center, Ortigas Center, and Eastwood City from 2015 to 2018, 75 percent are studio and one-bedroom units, ranging in size from 18 to 90 sqm.
13. Cities outside Metro Manila have highest surge in search volume
Bacolod tops the list of Philippine cities that experienced a spike in search volume in 2015. Lamudi data shows that Bacolod’s search volume surged 279 percent from the fourth quarter of 2014 (October–December) to the first quarter of 2015 (January–March). The City of Smiles is followed by Antipolo, Tagaytay, Baguio, Davao, and Bacoor, whose search volumes surged 118, 105, 95, 88, and 80 percent, respectively.
14. Quezon City has the most affordable office spaces for rent
Companies looking for an affordable office space to rent should head to Quezon City to find cheap commercial properties. Lamudi data show that office rents in Metro Manila’s largest city average Php503.79 per sqm per month. At the other end of the price spectrum are Taguig and Makati, which offer the most expensive office rents in Metro Manila (averaging Php763 and Php635 per sqm per month, respectively).
15. Women are more active researching properties online
According to Lamudi, 64 percent of online property seekers in the Philippines are women. This finding is consistent with research conducted in the West, which has shown that women are the primary users of online property portals. This makes the Philippines one of few Asian countries where women are heavily involved in making homebuying decisions.
16. Size matters in investment condos
Bigger condos, those with three bedrooms or floor sizes of at least 150 sqm, make for better investments if you plan to buy and hold. These condos are definitely more expensive but they offer good returns in terms of capital appreciation. According Colliers International Philippines, luxury three-bedroom condos in the three markets it monitors (Makati CBD, Bonifacio Global City, and Rockwell Center) are expected to appreciate in value by between 5.1 and 6.3 percent by the end of 2015.
17. Forbes Park is the most expensive subdivision in the Philippines
Average monthly rents in the very exclusive Forbes Park—home to business tycoons, foreign dignitaries, and at least one boxing icon—stand at Php402,459, making the enclave the most expensive area to rent a house anywhere in the Philippines.
18. Filipino-Americans prefer houses
Filipinos based in the United States prefer to purchase houses, according to January–June 2015 search data from Lamudi. More than half (57.83 percent) of all searches in the Lamudi website were for houses, followed by condos (16.58 percent). The most searched cities, on the other hand, were Quezon City, Makati, Manila, Tagaytay, and Baguio.
19. Condos close to train stations are more expensive
An average condo located within 100 meters of an MRT station in EDSA is at least Php16,645 more expensive per square meter than a similar, newly built condo situated more than 500 meters away, according to listings data from Lamudi.
20. Ayala Center is most expensive condo rental market
Makati’s commercial core commands the most expensive condo rent per square meter than any area in Metro Manila. Living in the area, which is within striking distance of Greenbelt, Glorietta, and most of Makati’s luxury hotels, can set a renter back Php1,144 per sqm per month, meaning a 100-sqm condo here can command monthly rent of more than Php110,000. Following Ayala Center are Century City and Rockwell Center, both situated in Makati’s Poblacion area, where condos command monthly rents of Php986 and Php973 per sqm, respectively.
21. Bigger condos are cheaper (on a per-sqm basis)
Condos are bigger are actually cheaper on a per-sqm basis. Condos in areas including Ayala Triangle/Apartment Ridge and Salcedo Village, average 275 and 126 sqm, respectively, while monthly rents average Php568 and Php652 per sqm, respectively.
In contrast, in the Mall of Asia Complex and Newport City, the average sizes of condos are 34 and 50 sqm, but monthly rents average Php850 and Php785 per sqm, respectively.
22. Caloocan will be the second most populous city by 2020
The City of Manila will be overtaken by nearby Caloocan as the Philippines’ second most populous city by 2020. This is according to an analysis by Lamudi using the annual average population growth rate released by the Philippine Statistics Authority in 2010. Caloocan’s projected 2020 population will be 1.88 million, compared to Manila’s 1.72 million.
23. Eleven cities will have populations of more than 1 million by 2025
Using the annual population growth rates recorded in 2010, 11 cities in the Philippines are projected to have populations of more than 1 million. These are Quezon City (3.95 million), Caloocan (2.115 million), Davao City (2.056 million), Manila (1.76 million), Dasmariñas (1.27 million), Antipolo (1.25 million), Zamboanga City (1.25 million), Cebu City (1.14 million), Taguig (1.12 million), Bacoor (1.11 million), and Pasig (1.022 million).
24. BPO workers hard-pressed to afford renting condos
With an average monthly salary of Php22,500, entry-level BPO cannot afford to rent a condo in either of these “affordable” areas: Eastwood City, Pioneer-EDSA, Poblacion (Makati), and San Antonio (Makati), where average rents range from Php19,838 to Php22,563 per month.
Using the 30 percent rule (spending not more than 30 percent of one’s monthly income on housing), only those working as managers, with an average compensation of Php75,000 per month, may only afford to rent a condo in these select areas.
25. How long Filipinos should work to buy a home
A salaried Filipino with more than 20 years of work experience and earning Php1.43 million per year may need 128 years’ worth of his salary in order to afford a house in Makati where average home price stands at Php184 million.
In contrast, this same person needs 4.16 months’ worth of his annual salary in order to afford a home in San Jose Del Monte, Bulacan, where the average home price is Php495,999.
26. Filipinos tend to buy as they get older
Based on its third quarter 2015 search data, Lamudi found that there is an almost equal proportion of renters and buyers among 18- to 24-year-old online property-hunters (50.2 percent for rent versus 49.8 percent for sale). However, there is a tendency for property-hunters to search for for-sale properties online as they get older (25–34 years: 57.3 percent; 35–44 years: 70.8 percent; 45–54 years: 72.6 percent; 55–64 years: 71.1 percent).
27. Most sought-after locations for land
Quezon City, Tagaytay, and Baguio are the top three most popular locations among property-hunters looking for land online. These cities are followed by Davao and Antipolo. The fact that only five Metro Manila cities were in the top 10 indicate that Filipinos are not too keen into buying residential land within the National Capital Region, either due to lack of supply, unaffordability, or both.
28. Filinvest Land bagged Clark Green City contract
Filinvest Land will be working alongside Bases Conversion and Development Authority to develop the 288-hectare Clark Green City, which is designed to be the country’s first-ever smart, green, and disaster-resilient metropolis.
29. The Torre de Manila case
The Supreme Court issued a temporary restraining order in June 2015 to halt the construction of Torre de Manila, a DMCI Homes project along Taft Avenue in Manila. This is in response to a petition filed by the Order of the Knights of Rizal, who claims that the tower taints the iconic sightline of Luneta Park’s Rizal Monument. A final decision on whether to demolish the tower or allow DMCI Homes to complete the project has yet to be reached.
30. Filipinos’ love for shopping continues
Proof that Filipinos love shopping, two massive shopping malls opened in Cebu City this year: the 470,790-sqm SM Seaside City, SM Prime’s 55th “supermall,” and Robinsons Galleria Cebu in the north reclamation area. Aside from big-box retailers, 2015 also saw the entry of Double Dragon’s CityMalls, community malls intended for smaller cities and towns.
In addition, Cushman & Wakefield cited Metro Manila as 13th among the world’s top cities for international retail brands, with 24 new entrants in the retail scene in 2014. Metro Manila was one of six Asian cities to make the top 15.
31. HLURB on real estate brokers, developers, and sellers
In early 2015, the Housing and Land Use Regulatory Board (HLURB) officially released two sets of revised implementing rules and regulations (IRR), which apply to the Subdivision and Condominium Buyers’ Protective Decree. The new IRRs aims to prevent real estate developers from making false representations in their advertisements, with the following information clearly indicated in all real estate marketing materials: license to sell number, project’s complete address, completion date, and complete name of seller, among others. In addition, real estate brokers and salespersons employed by developers must register with the HLURB before they are allowed to sell these projects.
32. Green buildings on the rise
According to KMC MAG Group, there is a growing trend toward green buildings in the Philippines, especially in Metro Manila. At the moment there are 22 buildings in Makati and Bonifacio Global City that are either applying for LEED certification or have been pre-certified. Going green brings a lot of benefits, according to KMC MAG managing director Michael McCullough, foremost of which include cost-efficiency and healthier workplace for employees. These benefits in turn will give property developers the ability to command higher rental rates.