After experiencing a slowdown for the past two and half years caused by the pandemic, Metro Manila’s luxury condominium market started making a comeback in 2022, according to the latest data from Colliers Philippines.
Joey Roi Bondoc, director of research of Colliers Philippines, said in their recent press briefing that the luxury units (P8 million and above or $145,500 and above) grabbed the largest share with 34 percent of total take-up, up from only 5 percent in 2022. Bondoc attributed the take-up in 2022 to the demand in projects located in major central business districts (CBDs) such as Fort Bonifacio, Bay Area and Ortigas CBD. “Colliers believes that the luxury and ultra-luxury segments will likely remain resilient despite rising interest and mortgage rates.”
Colliers Philippines also believes the continued improvement of Metro Manila’s infrastructure backbone will also play a crucial role in enhancing the prices of condominium projects across the capital region, particularly the luxury and ultra-luxury units. Bondoc said the increasing land values and prices of construction materials will also likely drive developers to introduce more premium residential units. Meanwhile, Colliers Philippines expects an aggressive launch of luxury units in the CBDs as well as Metro Manila outskirts.
“Major developers’ recent residential launches primarily cater to the affluent market. In 2022, about a third of newly-launched units are classified as upscale to ultra-luxury. In our view, investors prefer these luxury units due to capital appreciation potential and are a viable hedge against inflation,” Bondoc said.
A constant rise in land values coupled with surging prices of construction materials also compel developers to focus on the more expensive spectrum of Metro Manila’s condominium market.
Bondoc believes the luxury and ultra-luxury segments will likely remain resilient despite rising interest and mortgage rates.
“In our view, the continued improvement of Metro Manila’s infrastructure backbone will also play a crucial role in lifting the prices of condominium projects across the capital region, particularly the luxury and ultra-luxury units. Increasing land values and prices of construction materials will also likely compel developers to launch more high-priced residential units,” Bondoc explained.
According to Colliers Philippines, investors prefer these luxury units due to capital appreciation potential and are a viable hedge against inflation. A constant rise in land values coupled with surging prices of construction materials also force developers to focus on the more expensive spectrum of Metro Manila’s condominium market.
Colliers Philippines project a gradual price rebound starting this year would offset corrections in the market caused by a lethargic economic situation in 2020 and 2021.
“Previous crises have affected demand for residential projects in Metro Manila, resulting in a price correction. However, historical data would show that the luxury segment is resilient, exhibiting stability amid an economic crunch and showing signs of immediate recovery after global financial meltdowns.
Luxury and ultra-luxury projects in Metro Manila, in particular, recorded a steady rise in prices after the Asian and global financial crises. In our view, the demand for luxury residential units is likely to be sustained beyond 2023,”Bondoc explained.
In 2022, Colliers recorded the launch of 6,000 luxury and ultra-luxury units, representing 25 percent of total launches during the period. Among the luxury and ultra-luxury projects launched in Q4 2022 include Rockwell Land’s Edades West and Arthaland’s Eluria. These pre-selling projects’ total contract prices (TCPs) per unit range from P102 million to P149 million ($1.9 million to $2.7 million) with prices on a per sq.m basis ranging from P472,000 to P519,000 ($8,600 to $9,400).