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Philippines Business Report 2017

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Discovery Reports

Manila’s condo units offer residential property investors a taste of the high life

Manila is highly competitive for residential property investment, with its attractive prices coupled with a favourable exchange rate

PUBLISHED : Wednesday, 05 April, 2017, 12:36pm
UPDATED : Wednesday, 05 April, 2017, 12:36pm

Philippines president Rodrigo Duterte’s diplomacy with China has boosted Metro Manila’s residential property market, according to licensed real estate broker Joanne Almaden. She says her Bonifacio Global City-based agency, Phil. Property Expert, has signed an increasing number of leases and short-term rental agreements with Chinese-speaking tenants.

“The warming ties with Beijing certainly contributed to the confidence of Chinese buyers and renters of properties here,” she says. “At least 10 per cent of our tenants now are Chinese.”

Her company “last year closed contracts with a couple of Hong Kong-based investors for buying condo units, and for us to manage the rentals of these properties”, Almaden says. “But the Europeans and Americans are apparently very interested in bringing their capital here also.”

That’s because the Philippines residential property sector has been booming for several years, says Rick Santos, chairman and CEO of Santos Knight Frank.

“Much of this growth has been driven by the business process outsourcing [BPO] industry,” Santos says. The Philippines economy “grew by 6.8 per cent in 2016”, he adds, while the Asian Development Bank has revised its projections to 6.2 per cent in 2017.

Prime residential prices in Manila have continued to rise over the past three years, Santos Knight Frank says, citing the average annual increase in rental rates as “running between 5 per cent and 10 per cent”. Manila will continue to be highly competitive as a destination for residential property investment “with attractive prices for the prime residential market, coupled with a favourable exchange rate and build quality of international standards”, Santos says. “The capital will also continue to remain attractive for overseas investors, with Hong Kong and Singapore being key markets for potential inbound investment.”

Colliers Philippines deputy managing director Richard Raymundo has seen Hong Kong-based BPO companies set up in the Philippines, and his company has also performed “occasional sales” on behalf of mostly expatriate Hong Kong-based investors. Current listings include a penthouse unit at Raffles Residences, Makati for 139 million pesos (HK$21.5 million). The penthouse is about HK$200,000 cheaper than it would have been on January 1, thanks to the weakening peso.

The warming ties with Beijing certainly contributed to the confidence of Chinese buyers and renters of properties here
Joanne Almaden, Phil. Property Expert

Investors’ money goes a long way in Manila, Raymundo says.

Manila’s pricing is “about 10 per cent to 20 per cent of Hong Kong’s, so that makes it very attractive”, he explains. There’s also a good choice of condo units in and around the major business districts such as Makati, Bonifacio Global City and Ortigas, he adds.

“[About] US$300,000 would be an ample budget for a good quality one-bed unit; a three-bed would be US$600,000 up to US$1 million. A four-bedroom home could be in one of the upmarket subdivisions in the south of the city, but of course foreigners are not allowed to own landed property. Prices there would range from US$1 million to US$2 million.”

Filipino-Chinese families still live in Binondo because of business ties, but the younger generation “venture into the masterplanned communities of condominiums like the Bay Area, Rockwell, Makati CBD [central business district] and Ortigas”, he adds. “New Manila and San Juan are also popular as these are close to Chinese private schools such as Xavier and ICA”.

Almaden directs Hong Kong and Macau fun seekers to Pasay City, near the new bayside casinos and resort hotels. One-bedroom condos here start at 4.5 million pesos, including taxes, at developments such as SMDC’s Shore Residences and Anchor Land’s Sole Mare Parksuites and Monarch Parksuites.

The Fort Bonifacio area suits business couples with bigger homes that “typically start at 10 million pesos”, she says, citing Federal Land’s Park West and Megaworld’s Uptown Parksuites. Luxury condos in Manila range from “around 30 million pesos”, Almaden adds.

She also warns Hongkongers to deal only with licensed real estate professionals as their practices “are regulated by government authorities”. Finding agents, properties and learning foreign ownership regulations is easy on Lamudi and OLX websites.

However, Raymundo recommends Hongkongers should “buy in high-quality projects from a reputable developer who will, for a presale unit, hand over the unit on schedule and where good property management is assured”.