Despite rumors of an impending property bubble, things are looking up for the Philippines’ real estate market, according to the first quarter 2013 report by Colliers International.

The global property-consulting firm said the country’s property market is at the moment buoyant on the back of strong economic fundamentals and recent credit upgrades. Capital values and rental rates in Manila’s key central business districts have seen sustained increase as a result.

Julius Guevarra, associate director of Colliers International Philippines, said in a briefing that all sectors of the market are still strong. However, he cautioned that due to deliveries expected this year, there’s pressure on the office and residential market.

He added that the recent move of the Bangko Sentral ng Pilipinas aimed are minimizing banks’ exposure to the real estate sector is a prudent move.

It’s in anticipation of the bubble, which so far we haven’t seen.


According to Colliers, office rental rates continued to rise in the first quarter as supply remained “muted.” Monthly rental rates of premium offices rose 5.1 percent quarter-on-quarter to Php860–1,100 ($20–26) per square meter (sqm). This is expected to increase by 7.1 percent to Php880–1,220/sqm over the next 12 months.

In addition, capital values for office property have expanded quarter-on-quarter: 4.3 percent for premium office (to Php120,000–131,600/sqm), 0.2 percent (to Php71,725–98,890/sqm) for Grade A, and 0.7 percent (Php49,500–67,300/sqm) for Grade B.

One factor that has kept office rental space firm was the move by some developers to hold back the completion of new projects in anticipation of excess stock, said Guevarra. However, he said developers were “very quick” to harness opportunities. Office vacancy rate in Makati CBD for all grades stood at 3.38 percent in the first quarter of this year.

Residential Sector

For the residential sector, Colliers said premium three-bedroom rental rates in Makati CDB grew by 2.3 percent quarter-on-quarter to Php737/sqm a month. Premium rates for both Makati and Bonifacio Global City were said to be uniform and expected to improve by 8–9 percent over the next 12 months. In addition, supply is limited at Rockwell Center where premium rental rates grew by 2 percent quarter-on-quarter and have started to exceed the Php800/sqm level.

More Attractive to Foreign Buyers

Philippine luxury properties are also now becoming increasingly attractive to foreign buyers. In the recently concluded Pinoy Property Show held in Dusit Thani Dubai, Philippine-based developers and brokers have reaped approximately Php1.109 billion worth of sales from UAE-based investors.

According to consul-general Frank Cimafranca, the results of the show only prove that Philippine real estate is in “great demand” among the expatriate community in Dubai. Many of these foreign buyers are either buying retirement homes or looking into expanding assets in the country.

Philippine properties are also seen to be relatively undervalued compared to similar properties in Thailand and Indonesia, making them more attractive. Philippine laws allow foreign nationals to own condominiums or residential units in high-rise buildings, as long as foreign ownership in a single development will not exceed 40 percent.

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