Now that we wrapped up 2023, it’s time to look forward to New Year! Specifically, what does 2024 have in store for Philippines real estate? Is the country poised to fly higher from gains made from 2023? Or, are we due to touch the ground any moment? Let’s check out some of the Philippines real estate trends to watch out for in 2024!
2023 Philippines Real Estate Summary: Getting Up and Breaking Out
2023 marked a return of Philippines real estate to attractive market status. Foremost among 2023’s accomplishments is Manila’s blazing rise to the top of the luxury real estate residential market. The Philippine capital’s 21.2% year-on-year value gain managed to dislodge perennial destinations all over the world. This includes luxury destinations like Dubai, which fell to second place at 15.9%, and Shanghai, which jumped from 5th to 3rd at 10.4%.
Manila’s double-digit growth is more impressive considering that global residential home prices rose only by 2.1% between September 2022 and 2023. Manila’s firm grip on the luxury home market isn’t the only good news for the country in 2023.
Colliers Philippines Director for Research Joey Bondoc noted that Philippines real estate has moved past the black swan event that cratered the market during 2020 and 2021. While headwinds remain, tailwinds are more than making up to make the country an attractive investment destination. Despite inflation and a supply chain crunch that affected the entire globe, the Philippines became one of Asia’s most resilient and fastest-growing economies in 2023.
Infrastructure On Schedule
Another piece of good news is the state of the country’s ongoing infrastructure projects. Prior to the pandemic, the government embarked on a spending spree that resulted in a total of 194 high-impact Infrastructure Flagship Projects (IFPs). While a bulk focused on Luzon (76), other major areas such as Visayas (34) and Mindanao (25) also got important upgrades. All in all, the government made a commitment to spend $160 billion to see these projects through.
Among the ongoing major projects in Metro Manila include the Central terminal in Quezon City that will finally interconnect the capital’s elevated railway systems. Not only will the Unified Central Terminal in North EDSA close the loop between LRT-1 and MRT-3 systems but will also add a new subway system and the MRT-7 connecting Manila to Bulacan province. While the central terminal experienced delays in 2023, the Department of Transportation remains very optimistic about starting operations early in 2024.
2024 Philippines Real Estate Outlook: Residential Homes
The infusion of additional transport systems is emboldening Filipinos to take up residential homes in and near stations and terminals. Quezon City leads Metro Manila cities enjoying a windfall of residential projects due to its central location which includes the upcoming central terminal. However, it’s not just QC but the entire country getting ready to expand its residential offerings.
The Rise of Resort-Themed Horizontal Development
One noticeable trend is the country’s shift from vertical properties to horizontal properties. With Metro Manila becoming more accessible, many developers are upgrading their house and lot lineup. Encouraged by the Philippines’ rise in status in the residential market, many local developers are looking to create more resort or leisure-themed projects outside Metro Manila.
2024 might signal the start of increased building activities as real estate companies cash in on the rising demand from luxury market customers. Expect renewed building activity in tourist-friendly areas such as Palawan, Bohol, Cebu, Davao, Batangas, and others.
Expats Reenter The Market
With COVID-19 fading into memory, it’s business as usual for many companies. This includes the huge number of Business Process Outsourcing (BPO) firms and multinationals operating in the country for years. These companies are now more confident sending their expats back to the Philippines to mind the business. As a result, business districts in Metro Manila and major provinces are now experiencing a mini-resurgence in expats looking at homes for themselves and their families.
In 2024, developers and leasing agencies should make sure they have available inventories to cope with rising demand. Premium units are fast falling into the hands of the expat market, which is now looking at property offers to the tune of P670,000 to P750,000 per square meter.
One hiccup in the country’s rising prominence in real estate is the continued rise in prices of properties. Overseas Filipino Workers (OFWs) are showing concern that the increase in prices might soon overtake their income-earning abilities. Developers should note that the OFW market’s interest in owning properties grew from 8.1% to 11.7% in Q2 2023. Unless they find the sweet spot in terms of costs that OFWs can comfortably afford, they might find themselves locked out from this lucrative market. Specifically, OFWs are looking at a price range between P2.5 million to P7 million for a low/mid-income condominium unit.
2024 Philippines Real Estate Outlook: Office Space
Aside from residential homes, the Philippines is also poised to accommodate increased demand for office and hotel spaces. With demand seen to pick up for both office rentals and temporary guests, developers, and leasing agencies should take note of the upcoming Philippines real estate trends for 2024. Thankfully, developers are ready and waiting for the anticipated increase in demand. Colliers estimated the take-up to reach 300,000 sqm, 80,000 sqm higher than 2023’s estimated rate of 220,000 sqm.
Flight to Quality Options
Many BPOs are now applying flight-to-quality strategies that aim to ensure that their investments go into safer, more secure markets. The surge in interest in office spaces in BGC, Makati, and Ortigas Center can be attributed to this growing movement. Unsurprisingly, even new and quality spaces in these districts tend to be cheaper and available compared to other markets. In 2024, expect demand to rise for office spaces in key CBDs such as BGC, Makati, and Ortigas.
Beyond Metro Manila
However, there are also economy-minded tenants in less-expensive provinces such as Cebu, Bacolod, and Bulacan. Given the availability of talent all over the country, many BPOs are opening operations outside Metro Manila. Colliers predicts that in 2024, more office space inquiries will surface in emerging cities. These include developed provinces such as Pangasinan, Nueva Ecija, Palawan, and General Santos. All these areas are seen as next in line to become fully digitized cities. As such, BPO companies tapping into a lower-cost but equally effective labor pool will be happy to move there.
Demand for office space continues to thrive in CBDs such as BGC, Ortigas, and Makati. Conversely, others areas are announcing higher vacancy rates than expected. The Bay Area in particular is seen to offer lower, friendlier lease rates to prospective tenants. The Chinese infusion of the late 2010s has all but dried up due to a change in regulations.
This led to many Bay Area developers being left with more vacant properties than they liked. Similarly, the Alabang district is also experiencing a slowdown in office demand. More and more companies that started in South Metro Manila eventually left for to traditional CBDs like Makati.
2024 Philippines Real Estate Outlook: Hotel and Retail
The Philippines’ impressive GDP growth amid a global slowdown is attracting a lot of foreign interest. Hotels are expected to receive more foreign visitors while retail areas are also projected to open more multinational brand stores.
Improvements in infrastructure and roadways are cutting travel time significantly, which is a major factor for tenants when choosing a suitable host location. Metro Manila’s elevated Skyway, which is now fully operational, has reduced travel time from North Luzon Expressway (NLEX) to Makati to under 30 minutes, while an NLEX link to the SLEX entranceway in Muntinlupa takes less than an hour. The completion of railway extensions to nearby provinces such as Cavite, Bulacan, and Pampanga can help reduce dependence on travel by car or bus.
Meanwhile, the capital’s lone airport is getting reinforcements thanks to a fully functional Clark International Airport as well as an upcoming international airport in San Jose Del Monte, Bulacan. Once these major projects are finished, expect travel to vastly improve for both locals and tourists.
Attack of the MICE
2024 hopes to see efforts by the Philippine government to promote the country as a desirable MICE (Meetings, Incentives, Conferences, and Exhibitions) venue. Businesses have completely moved full circle from pandemic restrictions and are now back to doing business things such as traveling, networking, and attending conferences. With 2024 signaling a full year removed from COVID-19, the Philippines hopes to claim a fair share of business events. It helped that hotel operators and real estate developers have worked full-time to create MICE-friendly venues. The recent FIBA World Cup that played out across several hotels and venues proved that the country is more than ready to play host.
Tourists Are Coming Back Slowly
2023 showed that tourism is starting to make a comeback. Department of Tourism data showed that 4.4 million foreign visitors stepped foot into the country as of October 2023. In comparison, only 2.65 million visitors arrived in the Philippines in 2022. Notably, more than half of the arrivals came from South Korea, Japan, China, the United States, and Australia. While 4.4 million is around half of the record 8.3 million tourists in 2019, 2024 may well be the next incremental step toward the DOT’s target of 12 million visitors by 2028.
Malls Should Rethink Space
Meanwhile, retailers are having a field day getting back to pre-pandemic operations. However, the growing popularity of online stores is making mall operators think twice about allowing too much mall space just for retail. Colliers advises that malls should devote enough space to activity centers and exhibit halls. This can encourage retailers to band together to hold fairs and expos, which can attract more people, which in turn can lead to more spending.
Foreign Brands Going All-In
Finally, the country’s buoyant economy means an increase in consumer demand. This makes retail space a very attractive venture for foreign brands looking to expand their customer base. It helped that the government has been actively softening regulations on their entry into the local market. 2024 sees operators welcoming new brands by accommodating their specific requirements.
What This All Means for Philippine Real Estate Homeowners and Investors
Given that the Philippines real estate scene is overflowing with positivity at this point, would-be investors and homeowners unsure of pulling the trigger may want to do so now. The trifecta of a great economic climate, a supportive government, and a hot investor climate all point to a great year for real estate in 2024. Great property deals and bargains are out there for the bold house hunter but you’ll need lots of research and patience as well as some bit of luck, to find some hidden local gems before the market goes white hot.
An easier way to look for investment opportunities would be to go online. However, jumping from one real estate website to another can prove to be a painful, ineffective experience. Developer websites are notoriously one-off ventures that rarely stay updated on crucial details like available units and price.
Searching for the Perfect Investment Opportunities Is Easier With Ohmyhome
A more efficient way to spend your time is to visit Ohmyhome Philippines, the country’s premier property tech platform. Ohmyhome allows you to fine-tune your search preferences so that results will only display properties with your preferred budget, location, or turnover date. In addition, an account with Ohmyhome also means access to a team of real estate professionals and customer service specialists. Together, they can lead you to the best properties, great financing deals, and timely promotions. Even better, Ohmyhome can help you dispose of your current properties to make room for a new investment.
In 2024, get the best homebuying experience and take advantage of a bullish Philippines real estate scene. Jumpstart your property search today by signing up for a free Ohmyhome account.