Home prices in Manila could be more expensive in the future, particularly for condominium units, likely surpassing property values in Makati due to the rapidly growing commercial district in the Manila Bay Area.
By 2021, Colliers International expects the increasing demand from offshore employees to increase the values of condo units in the area. That means many local homebuyers could be priced out of the market. A better alternative involves finding properties in nearby provinces, such as Cavite. For instance, Lancaster’s Catherine Model house is among the available options in the province.
Employees of Offshore Gaming Firms
According to Colliers data, property developers launched more than 4,800 condo units between July and September 2018. As much as 26% of those units are located in the Bay Area, where demand is most noticeable from employees of offshore gaming firms. Whether for sale or rent, these foreign workers look for residences that are near their place of work.
In response, real estate developers have become more aggressive with project deliveries even if the central bank has increased interest rates for financial instruments. Joey Bondoc, Colliers manager for research, said that the sector’s continued push to launch more homes partly stems from a lack of supply that has been exceeded by the current level of demand.
More Expensive Than Makati Homes
The increasing demand for homes in the Bay would cause the district to be a more expensive place than Makati, where the central business district would only have 28,700 completed units compared to 29,500 in the Bay Area in the next three years. Colliers based its forecast on pre-selling projects. Prices as of the start of 2018 rose by up to 30%, which is a huge increase given the fact that the year has not ended yet.
If you want an idea of how costly it is to buy a condo in the Bay Area, the price per square meter is between P220, 000 and P290, 000 as of the third quarter. With this price, it makes sense to look for houses in other places. Many developers have recognized the need to fill the demand from local buyers as well. Prices in the Bay Area will not only increase because of the growing interest from foreigners but also due to the planned transportation infrastructure projects in Metro Manila.
Major Subway Project
The government plans to build a major subway network within Metro Manila in the next three to seven years. Colliers said the P350-billion project could further increase the value of properties in the region if the project reaches completion.
Properties that are located within a kilometer away from the subway’s terminals will particularly appraise in value since accessibility will be a key factor for the increase in prices after the completion of any transportation link in the area.
Metro Manila remains a good place to invest in houses. For the ordinary homebuyer, however, it will continue to be an expensive place to acquire properties. Consider other properties in Cavite and other emerging cities near the metro, where prices are more affordable.