How To Monitor Real Estate Market Trends
The Philippine real estate landscape is currently booming, with more developers entering the market as well as the demand for both residential and commercial products increasing. Thanks to the country’s improving economic stability despite crises in different international markets, the Philippines maintains its momentum. Because of this, even real estate investor loans are more relaxed as compared to before.
Last year, a whitepaper about the state of real estate market in the Philippines said that since 2014, the country’s property sector has been steadily booming, driving more developers to erect more properties. “Better economic conditions and ramped up government spending drove real estate growth, if not for the residential sector but for other segments, such as industrial, hotel, retail, and office. The Philippines was also named one of Southeast Asia’s best performing markets,” the paper furthered.
With the robust market and a promising demand for both residential and commercial properties, real estate loans for investment property are also on the rise.
By the numbers
In a report by real estate news website Global Property Guide, the nationwide residential real estate price index is one of the most competitive in the region. According to the Bangko Sentral ng Pilipinas, the national index rose by 9.2%, with a quarter-to-quarter index climb of 1.9 % based on real estate investor loans reports. When broken down by property types, the adjustment of prices in the first quarter follows:
• Condominium units saw a price increase of 12.9%
• Single-family homes’ price climbed by 8.1%
• Duplex homes prices soared by 6.7%
• Townhomes prices went up by 8.5%
Location also matters when it comes to the rate of increase of properties. “In the National Capital Region (NCR), residential property prices surged 9.7% (8.5% inflation-adjusted) during the year to Q1 2016 while in Areas Outside the NCR (AONCR), prices rose by 9.4% (8.2% inflation-adjusted), according to the BSP,” the report furthered. While the rates in Metro Manila as well as neighboring areas are becoming quite competitive, the NCR’s prime business districts have decelerated in terms of price increase. Due to lower demand of luxury condominium units, the following rates have been recorded:
• In Rockwell Center, the average price for a 3-bedroom condominium rose by 5.5% (4.3% inflation-adjusted) to PHP162,500 (US$3,433) per sq.m., or a 0.2% q-o-q growth.
• In Fort Bonifacio, the average price for a 3-bedroom condominium increased by 2.6% (1.4% inflation-adjusted) to PHP150,000 (US$3,169) per sq. m., or a 2.6% q-o-q rise.
In totality, this robust economic activity has prompted real estate loans for investment property reach P1.083 trillion just last March, according to the Banko Sentral ng Pilipinas’ data on universial and commercial loans, signaling how big the market has become over the past few years.
Retail is still king
Developers have been rushing to convert idle lands to either residential or commercial and real estate investor loans are on the rise—indicators showing that it is high time for people to invest in property. While there are countless developments everywhere in the country, especially in Metro Manila, retail is still the hottest property highly favored by both investors and lessors of real estate loans for investment property.
According to renowned international investments management company Jones Lang LaSalle, the demand for more upscale shopping and leisure centers prompted the rise of rent rates in the Philippines. “Of the 18 featured markets, only two (Auckland and Manila) saw a quarterly rental increase of 1% or more for the most expensive locations, while the remainder mostly recorded flat rents,” the company’s retail index report said.
“Local and international brands remain interested in entering and expanding in Manila. Brands that opened their first stores in 2Q16 included American restaurant Texas Roadhouse in Uptown Mall, Singaporean brand Pezzo Pizza in Robinson’s Place Manila and Canadian apparel brand Joe Fresh in Shangri-La Plaza. Notable expansions during the quarter were Baskin Robbins, Ippudo ramen, Estee Lauder, Bobbi Brown, and Kipling,”
Does this mean that people are better off using their real estate investor loans in retail? One can only hope so, as the consumer market demands for better, more diverse products both local and international.