Metro Manila has established itself as a key player in the global luxury property industry. It was the leading market in Knight Frank’s 2019 Prime International Residential Index out of a hundred markets assessed. Along with only a few other locales in the world, Alabang was highlighted as one of the top affluent neighborhoods to watch out for. Growth factors such as overseas workers’ remittances and a strong service sector had driven growth in households’ disposable income and powered consumer spending. However, the general outlook for the market’s performance had been uncertain as last year’s events unraveled.
The onset of the global crisis early in 2020 had severely impacted multiple industries, slowing down project development as businesses from the construction and logistics sectors experienced major disruptions in their supply chains. Developers experienced project delays, brokers halted their site viewings, and the country’s overall consumer appetite remained low.
In spite of these, the market remained optimistic.
Upscale price segments show the most growth
Lamudi’s latest trend report titled Indicators of Growth: Where to Invest in 2021 revealed that in the latter half of 2020, leads for properties across all price bands continued to grow year-on-year. The development evidenced a sustained interest and a recovered buying appetite from property seekers.
Of all price ranges, the 9M to 12M or upscale price range showed the most growth in that period as the number of leads rose by 89%; this is followed by the 20M and up range and 6M to 9M range, which posted 77% and 71% growth, respectively, in the second half of 2020 compared to a year before. The performance of these price ranges exhibits an increased demand for listings belonging to the luxury price segment in particular. Given its resilience throughout the pandemic and the global economic slowdown, Metro Manila has cemented its position as a leader in the upscale real estate market.
Luxury rental market in CBDs unfazed by shifts in work arrangements
The Lamudi report explored hotspots in the country that, given their performance, last year, are seen to grow further in 2021. Some of which were identified as key markets for prime real estate.
Pageviews for Central Business Districts (CBDs) revealed that CBDs are slated to continue growing as host to opulent listings in spite of a softened overall demand last year. Interestingly, the highest price ranges attracted the most pageviews for both buy and rent markets last year. Pageviews for purchase listings above 20M grew by 31% year-on-year in the second half of the year, while pageviews for rental properties priced above 1M rose by an impressive 205%.
With listings above 20M contributing the largest share of pageviews in January 2021, the positive trend is seen to sustain itself throughout the year. The demand for upscale rental properties in commercial hubs shows that proximity to the office continues to be a principal consideration amid the crisis, and highlights the desire for the integrated lifestyles CBDs offer.
Upscale residential demand in cities outside NCR flourishes
Outside the National Capital Region (NCR), pageview growth for upscale price points grew most significantly as well. In the cities assessed — Cagayan de Oro, Cebu City, Davao City, Iloilo, and General Santos — there was a high concentration in pageviews for listings priced above 20M in the latter half of 2020, as it composed 18% of all pageviews.
The price ranges that attracted the highest growths in pageviews in that period were the luxury listings — those priced 9M and up. Value appreciation in these cities is supported by a growing expatriate community, interest from audiences overseas, and the development of massive infrastructure projects from technoparks to bridges.
Lamudi encourages developers to explore diversified projects in these cities, such as meeting the desire for upscale real estate. Regional dependencies on areas such as Cebu City open it up to investment from residents of nearby islands in Visayas, such as Bohol and Negros Occidental; given these, real estate companies looking into key cities outside of NCR should prepare to address the needs of property seekers in connected markets.
Sources: Knight Frank