Be bullish on the real estate market; you’ve got the numbers backing you up
Here is good news: the Philippine property market is one of the few in the world where demand is still growing.
It is no big secret that we at Leechiu Property Consultants (LPC) have taken quite an optimistic view of the Philippine real-estate industry throughout these challenging times. But numbers do not lie; our studies have consistently shown that it is one of the most resilient markets in the world. Let me support our outlook—with hard data.
Last quarter, office demand was the highest it has been since the start of the pandemic. The first half of 2021 posted 291,000 sqm or 75 per cent of last year’s demand. Even more significant is that the BPO industry accounted for 92,000 sqm or 54 per cent of the second quarter of 2021 take-up. This translates to a remarkable 160 per cent increase from the first quarter’s 35,000 sqm. Our numbers show that outsourcing to the Philippines remains a viable business strategy to reduce operating costs for US-based companies. With this growth comes an increase in employment in the country.
Outside Metro Manila, provincial office markets now have a golden opportunity to attract more companies searching for new labour segments as they de-risk from a concentration in the metro. Consequently, many provincial capitals are experiencing an unprecedented construction boom attributable to IT-BPM firms and tourism.
Currently, there are over 119 IT parks and mixed-use developments or approximately 134,000 hectares of master-planned communities across the nation.
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More are being planned through the assistance of IT & Business Process Association of the Philippines’ (IBPAP) Digital Cities project. LPC remains one of the key movers of this undertaking which identifies new expansion areas for BPOs and related firms in cooperation with local government units and real estate players.
Following months of home confinement during the lockdowns of 2020 and the resurgence of Covid in 2021 particularly in the business districts, the concept of Work From Home (WFH) remains a hot topic. Last year, we discovered the benefits and challenges of home-based work. While employers implemented this to address the health crisis, they are also studying how working from home can be more productive and better balance family time.
In the next six months, many companies will be figuring out the right proportion between home- and office-based employees.
The residential market saw declines in buyer and developer confidence at the start of the pandemic. Still, it has in large part recovered and continues to do better even after 18 pandemic months. Condominium prices in BGC have reached as high as PHP750,000 per sqm, while Makati’s maximum price level has hit PHP660,000 per sqm. Pricing in Davao and Metro Cebu has also reached Metro Manila levels ranging from PHP314,000 to PHP370,000 per sqm. As the residential condominium market continues to improve, we are likely to see more launches in the second half of 2021.
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