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Metro Manila property prices surge by 250%

Posted by Vincent on December 13, 2022

Published December 12, 2022

Residential property prices in Metro Manila have climbed by more than double the levels recorded in 2021 given the limited launches made in the past year, data released by real estate brokerage services firm Leechiu Property Consultants on Monday showed.

In a virtual briefing, LPC executive director for research and consultancy Roy Amado Golez said prices of older projects in Metro Manila posted an annual growth of as much as 250% per square meter in the fourth quarter of the year.

“We think this is because of the limited supply in the market. Launches have been quite low since the first quarter of 2022,” he told reporters.

Data showed that units launched throughout the year stood at 10,009 or 61% lower than the 25,911 in 2021, while units sold fell by 7% to 35,539 from 38,065 the previous year.

In terms of newly launched projects, prices have increased by 215%, taking into consideration prices of the five projects this year and the seven projects recorded in the fourth quarter of 2021.

“Primarily because of the increase in the launches of the luxury segment. We saw tremendous growth. Averages were pulled upwards by that sector,” Golez said.

The luxury segment — covering units worth P68 million and above — reported a 484% quarterly growth in sales, while sales of the high-end segment or those prices between P12 million and P68 million dropped by 36%.

The upper middle income segment (P4 million to P7 million) grew by 53%, the middle income segment (P2.3 million to P4 million) by 15%, and the lower middle income segment (P1.4 million to P2.3 million) by 64%.

For upscale second homes in exclusive gated resort communities in Batangas, Bataan, and Cavite, prices have increased by 220% to range from P80,000 to P125,000 per square meter from between P14,000 to P50,000 per square meter in 2019.

Increases were also seen in Kawayan Cove where prices grew by 220% to range from P45,000 to P93,000 per square meter, and in Anvaya Cove by 116% to range from P25,000 to P55,000.

Demand for office space in the country closed at around 975,000 square meters, up from 540,000 square meters in 2021 and 389,000 square meters in 2020.

Bulk or 466,000 square meters were taken up by the information technology-business process management (IT-BPM) sector, while traditional offices occupied 448,000 square meters.

“Up to mid-2022, it was difficult to visualize year-end demand hitting close to the 1 million square meter mark. The results have exceeded expectations but we can’t put our guard down just yet,” LPC chief executive officer David Leechiu said.

“The IT-BPM sector continues to stabilize and anchor the economy — not only in Metro Manila but also in other key cities of the country. With traditional office occupiers now also enjoying recovery, real estate is likely to surpass its remaining obstacles in 2023,” he added.

Moving forward, Leechiu said office space demand could reach up to 750,000 square meters next year should Philippine Offshore Gaming Operators (POGOs) be allowed to continue in the country.

He earlier said the country stands to lose over P100 billion should the industry be forced out — P47.5 billion in the real estate sector, P5.8 billion in annual taxes, P9.5 billion in annual electricity costs, and P5.25 billion PAGCOR revenues.

He also said there would be losses of P11.4 billion in annual expenditures, P952 million in daily spending, P52.5 billion in fit-out costs, and up to P57.1 billion in income taxes from foreign full-time employees, as well as up to 347,000 jobs lost.

“If you have POGOs then I think you will bring the market back on steroids at a time when we need it because I think the whole world is in a very precarious state,” Leechiu said Monday.

“Any bit of stimulus and injection and catalysts for the positive will help insulate us from whatever the damage the world is going through,” he added.

Finance Secretary Benjamin Diokno in September said the country should do away with POGOs, citing “social” and “reputational” risks.

The DOF in September 2019 already threatened to shut down POGOs with tax liabilities, with uncollected withholding income taxes then estimated at P21.62 billion. A number of POGOs have since been closed.—AOL, GMA Integrated News

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