Demand for luxury condos rebounds in nine months

Photo Courtesy of srresidenceschicago.com
Photo Courtesy of srresidenceschicago.com

Demand for luxury condominiums in the Philippines bounced back in the first nine months of 2022, according to real estate services firm Colliers.

Colliers said in a statement the luxury condominium market grew this year, led by strong demand for projects in Fort Bonifacio and Ortigas Center.

This segment covers condominium units priced at P8 million or more.  Luxury condominium represented 28 percent of condominium units sold from January to September, according to Colliers.

Colliers said pre-selling condominium take-up increase 7 percent to 6,100 units in the third quarter, from 5,700 units sold in second quarter.

This brought the nine-month take-up to 14,900 units, surpassing the 12,400 units sold in 2021.

It said improving consumer and business sentiment supported the demand for residential properties, but rising interest rates may pose a risk to this outlook.

The Bangko Sentral ng Pilipinas adjusted its overnight borrowing rate by 75 basis points to 5 percent — the highest in nearly 14 years. Since May, the BSP has raises its rates by 300 bps to curb inflation and prevent the peso from further depreciating against the US dollar.

“Despite higher interest rates, we have seen a stable demand for upscale to ultraluxury condominium projects in Metro Manila… We believe that the ultraluxury segment will likely remain resilient amid the rising interest and mortgage rates,” said Joey Roi Bondoc, associate director and head of research at Colliers.

Colliers also said there was a “healthy level of price increases” for luxury residential projects.

“We believe that the increase in prices will only result in investors and end-users looking for greater amenities as well as innovative facilities. Due to Metro Manila traffic, there will be greater demand for connectivity to master-planned communities and topnotch concierge services,” Bondoc said.

Bondoc said there are also more discerning buyers, and developers should innovate and differentiate in a highly competitive luxury residential segment.

The most expensive condominium project in Metro Manila is at P495,000 (or $8,400) per square meter, still mutliple times cheaper than luxury condo units in Hong Kong.

 

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