Welcome to the New Year!
As we begin the new fiscal year of 2018, it’s important to keep an eye on how December of 2017 looked to identify momentum and new opportunities.
For the Philippine real estate market trends, here’s our summary and commentary of the Jones Lang Lasalle Philippine Property Market Monitor for December 2017 and their Asia Pacific Property Digest for Q2 of 2017, and what it means for the first half of 2018. In it, you’ll find some interesting insights that may help you decide on where to focus your time, money and resources when it comes to the real estate business for the next 6 months.
- There are a couple of strong underlying economic forces that are driving the real estate industry: First, the average foreign exchange rate from November 2017 was PhP 51.04. This high rate can encourage USD earners to invest more in the Philippines.Second, tourist arrivals growth increased year-over-year by a whopping 11.5%. This should tell you that foreign prospects are more open to visiting the Philippines so continue to educate and encourage them on how to travel here.
- For the residential sector, “the residential market sustains stable growth due to strong demand for condominium units,” says Claro Cordero Jr., Head of Research for JLL Philippines. Based on data from the Real Estate Price Index of Bangko Sentral ng Pilipinas (BSP), condominium prices continued to increase by 0,8% year-over-year.Most of the demand came from expat and multinational executives, foreigners married to Filipinos and high-income Filipinos.Commentary: What is your marketing plan to target these audiences effectively and efficiently?
- Expansion by new developers like Priland Development Corporation who started in 2011 and Euro Towers International who started in 2010, are increasing overall market inventory and competition.Priland is building two low-density towers with 312 residential and home office units in Cebu. This project is scheduled to be completed in 2020.Euro Towers International is scheduled to build a 27-storey condominium spread across a 4,000+ sqm lot near Ayala Fairview Terraces and SM Fairview with close access to the upcoming MRT 7 Line.
Commentary: In any good market, there’s competition. If there was no competition, that would worry me more. What can you do to differentiate yourself in 2018 to beat the competition?
- With the growth of residential, the retail sector will parallel it’s growth. A notable expansion is the Outlets in Batangas, schedule to open in April 2018. The Outlets will consist of 30,000 sqm of leasable area on a 9.3 ha development that’s located inside the Lima Technology Center.
- And of course there’s the Office, Outsourcing and Office sector that continues to show strong growth. Four significant projects but across broad areas make it interesting in Quezon City, Ortigas, Davao and in the Bay City. The Aspire Corporate Plaza in the Bay City will be completed in 2018. This building will consist of 17,000 sqm of gross area. With an estimated 35% of units sold, asking prices for office spaces for sale start at PhP 200,000 per sqm. In Davao, Skynora Corporation is promoting an estimated 5,000 sqm of BPO, serviced and co-working space in Robinsons Cybergate Delta.
Even US-incorporated companies like Sales Rain continue to invest growth in the Philippines. Sales Rain provides flexible workspaces and currently has six offices and is about to launch a 2,000 sqm co-working space in the penthouse suite of Pioneer Highlands in Mandaluyong City.For the strong and divers community of Quezon City, PPC One Estate is planning a 2019 launch of a 26-storey Grade A office catering to the offshoring and outsourcing industry located at Quezon Avenue corner Scout Reyes Street in Diliman.
- Overall, continued growth in the Philippine Real Estate Market across many sectors are stable. Growth rates are supported by other factors like:
– Rents recorded an increase of 1.7% quarter-over-quarter in 2Q2017
– Vacancy rate in Makati CBD and BGC dropped by 160 bps
quarter-over-quarter to 1.4%.
As a real estate trusted advisor, knowing the Philippine real estate market trends, and understanding the economic drivers by sector and region are important so that you can help your customers make educated and well informed decisions. With these economic opportunities outlined above and if done right, you’ll create customers for life.
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Technology Evangelist super passionate about helping the industries of eCommerce, SMEs and real estate in the Philippines reach new levels of success.