As Manila’s luxury real estate prices rise, is it a good time to buy now?

Experts tell Tatler why Manila’s luxury real estate prices have skyrocketed and why buying now is the best option

In 2023, Santos Knight Frank, a premier real-estate agency in the Philippines, reported exciting news—prices of luxury residential units in Metro Manila grew by an impressive 21.2 per cent, the fastest in the world. In comparison, Dubai’s luxury residential prices increased by 15.9 per cent, while Shanghai’s prices jumped by 10.4 per cent. “It’s not the first time that Manila’s prime residential price growth was ranked number one in our Prime Global Cities Index,” notes Rick Santos, chairman and CEO of Santos Knight Frank. “The last time was five years ago in 2018 when prices grew by 11 per cent.” Despite a recurrence, it seems especially telling that the past year’s growth doubled in 2018.

Above Park Central is one of the luxury residential areas envisioned for the future

Park Central is one of the luxury residential areas envisioned for the future

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Attributing this to three main reasons, Santos shares that factors unique to Metro Manila have made the city so valuable. “Firstly, the prime residential stock in Metro Manila is limited, and that affects average prices, especially when you have a lot of high-net-worth buyers in the market,” Santos shares. Ayala Land’s Group Head of Marketing and Communications, Chrissy Roa, adds that local buyers purchase leisure properties for investment or eventual end use as second homes or for inheritance. “The great economic and investor climate could pave the way for a strong demand for buyers and sellers,” she adds.

Not only is Metro Manila an attractive investment for locals, but many international buyers have also been looking into leasing and purchasing. Despite rising interest rates, strong investor confidence in the current administration has buoyed the real-estate market. “President Marcos’ support in attracting more investments to the Philippines is bearing fruit, and his policies create positive ripple effects across the economy and the confidence to do business in the Philippines,” says Roa.

Above Luxury makes great investments as they allow people more space and room for their lifestyle just like the units at Filigree's Two Botanika

Luxury makes great investments as they allow people more space and room for their lifestyle just like the units at Filigree's Two Botanika

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What makes Metro Manila so attractive—particularly to foreign buyers—can also be attributed to prices. While price growth is high, land remains relatively affordable compared to cities worldwide. Santos shares that in 2022, US$1 million could buy someone around 158 square metres of prime residential property in Manila, quite a difference when compared to the 17 square metres it could afford you in Monaco, the 21 square metres you could get in New York, or the 33 square metres it could buy you in Singapore. “Manila’s competitive prices in the prime residential market make it a great bargain for international buyers looking for the next destination of opportunity,” Santos reveals.

Throughout the pandemic, Metro Manila was also the only prime residential sector with a resiliency in demand. “The pandemic has caused buyers to consider second homes,” Santos notes. Fourty-one per cent were more likely to buy another home because of the pandemic.” This is because luxury seekers want exclusivity and peace of mind, which were particularly difficult to find during years of tumult in 2020.

Above Prime locations are usually located near central districts

Prime locations are usually located near central districts

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“Luxury developments are accessible to very few,” notes David Leechiu, CEO and co-founder of Leechiu Property Consultants, Inc. “Ultimately, buyers of luxury products are willing to pay the premium as they are not only paying for the space but also the level of comfort these projects offer.”

“Luxury is delivered and measured not only by the developer’s standards but also, more importantly, by how it meets expectations satisfactorily and adds value to our customers whether they are investors or end users,” adds Roa.

Above Aesthetics and mindful design also add value to the property as can be seen in the elegant high glass ratio façade of Park Central Towers, which allows natural light and expansive views to stream in

Aesthetics and mindful design also add value to the property as can be seen in the elegant high glass ratio façade of Park Central Towers, which allows natural light and expansive views to stream in

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Santos also claims that 2024 is definitely “the year to buy”. While investors or homeowners can still bargain, Santos notes that solid business confidence and resilient economic performance will also make for intense competition regarding the best properties on the market.

“Even so, it is best to plan for a luxury real-estate investment carefully,” says Roa. “Fundamentally, establishing a clear objective or an end goal to determine what property to invest in would be ideal.”

So, what is the best way to bag prime real estate this year? Leechiu shares that it would be wise to take advantage of preselling projects. “Five to ten per cent of capital appreciation normally happens within six months from launch,” he shares. “Plan your finances and ensure you have enough to cover the downpayment and the rest of the property costs, including all incidentals. You can also opt to buy below-market properties but require cash payments.”

Above Filigree's Two Botanika is built with sustainability in mind

Filigree's Two Botanika is built with sustainability in mind

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This year, watch out for exciting trends that could help you find your second, third, or even fourth home. Generally, trends show a growing preference for and awareness of properties that offer sustainable and green features; these include renewable energy or wellness-focused specifications. Horizontal developments within Metro Manila are also popular as end-user buyers looking for more space to move around; this could even take investors out of the city. “Prices of properties outside Metro Manila will significantly increase as infrastructure projects are completed,” notes Leechiu. “This is true for the township developments and even the second homes in resorts outside the capital region.”

With all this excitement keeping the real-estate industry abuzz, it becomes evident that Metro Manila—and its adjacent metro cities—is the place to be. “Why would you look elsewhere when there is so much opportunity here in the Philippines?” asks Santos. “We expect a positive couple of years because of strong business confidence and resilient economic performance, so strike while the iron is hot.”

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