Outlook for 2024: Anticipating a Revival in the Philippine Property Market [Download Report]
The Philippine real estate market is gradually recovering from the profound impacts of Covid-19 in 2020 and 2021. While the rebound shows variations across submarkets, there is optimism from the 2024 Property Outlook reports of Colliers that sustained macroeconomic growth and the implementation of sound economic policies will contribute to a faster sector recovery beyond 2024.
- For office landlords, strategic focus on specific sub-locations offering development opportunities, especially in second and third-tier cities, is recommended. Emphasizing sustainability initiatives among occupants is also crucial.
- Residential developers are encouraged to explore the potential of launching resort-themed projects outside Metro Manila.
- Mall operators should persist in renovating and redeveloping retail spaces, coupled with curating engaging activity center events.
- Hotel operators are advised to maintain an assertive approach in introducing both domestic and international brands. In the industrial sector, there is an opportunity for growth by catering to the demand from emerging industries such as electric vehicles (EV).
The Recommendations:
Shift to horizontal from vertical
Developers will continue to explore horizontal residential projects outside the capital region, driven primarily by demand from end-users. Colliers has observed the growth of resort or leisure-themed projects beyond Metro Manila. We anticipate similar projects being launched as property firms respond to increasing demand from a discerning and affluent market. Colliers suggests that property firms delve deeper into the feasibility of introducing more resort-themed developments outside Metro Manila. The demand for such projects is additionally fueled by investors’ preference for greener and more open spaces, reflecting the key requirements of end-users and investors in the post-COVID era.
More flexible payment terms
Developers need to keep providing affordable monthly payments and flexible payment plans. They should also come up with creative and appealing ways to pay, such as giving discounts to those who pay in full upfront. As more projects are completed, property companies should keep offering rent-to-own (RTO) options, especially for projects about to be finished. In 2024, we expect rent-to-own schemes to become even more common.
Demand for budget-friendly to lower mid-income residential units will be fueled by Overseas Filipino Workers (OFWs).
Developers need to stay proactive in making these units available to households receiving remittances from their relatives working abroad. According to data from the Philippine central bank, the proportion of OFW households intending to set aside a portion of their remittances for property purchase rose to 11.7% in Q2 2023, up from 8.1% a year earlier. With an increasing number of Filipinos deployed for overseas employment and a consistent uptrend in remittances, the residential demand nationwide is expected to receive ongoing support.
Joint ventures poised for success.
In response to the limited availability of developable land in Metro Manila and the growing desire for luxury projects, Colliers observes an increasing trend of joint ventures between local property firms and foreign developers, particularly Japanese companies. It is believed that these joint ventures will enable local players to distinguish their projects in the market. Emphasizing upscale amenities, integrated development features, top-notch concierge services, and the strong potential for capital appreciation should be a focal point for developers involved in these joint ventures. These factors are considered crucial considerations for discerning buyers in the real estate market.
DOWNLOAD THE REPORT HERE: 2024 Property Outlook | Philippine property rebound in the offing
Source: Colliers
