In the recent Wealth Report from Knight Frank published in Mansion Global in February 2024, Manila was declared the fastest-growing market in the world for luxury real estate. The report cited that prices for luxury homes and condominiums in the Philippines’ capital city have grown by 26.3%, as opposed to 16% for Dubai and 15% for The Bahamas.
The demand for luxury real estate in Manila has been influenced by many factors, all of which may affect the real estate market for the rest of the country. We look at some of these factors that are driving the current demand.
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1. Improved Urban Planning and Development
It’s no secret that the rise of luxury properties in Manila coincides with the development of residential properties within a short distance of the metro’s shopping malls and top business districts. Luxury real estate developers working in the fastest-growing cities in Metro Manila have been smart enough to build both commercial and residential areas alongside each other.
The rise of “mixed-use” developments, for example, has ushered in a new era for luxury real estate in Metro Manila. Developments such as Eastwood in Quezon City, Rockwell in Makati, and Bonifacio Global City (BGC) in Taguig are conceptualized as microcities where malls and condominiums are within walking distance of office buildings.
2. Luxurious Selling Points and Amenities
Luxury real estate amenities in Manila have gone a long way from the add-ons of the past, such as swimming pools, clubhouses, and backup electricity generators. Many developers have started to use a combination of advanced technology and ultra-sophisticated extras to lure in new investors and homeowners.
Some of the unique selling points of luxury real estate properties include high-tech security systems, futuristic architecture, sustainable building materials, minimalist floor plans, and private parking. All these extras serve to provide an added sense of sophistication to high-end properties.
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3. Relaxed Foreign Ownership Regulations
The push to allow more foreign ownership of properties in the Philippines has resulted in a growing demand for luxury real estate from non-Filipino investors. These include investors from China, Japan, and Thailand, who have shown interest in both potential homes and investment properties.
Once these regulations on foreign ownership of property are loosened, it could pave the way for more foreigners to invest in the luxury property market in Manila as a means of expanding their financial portfolios for long term wealth building.
4. The Rise of The Upper and Middle Classes
With the growth of the upper and middle classes in the Philippines, there is a greater push for investing locally in luxury real estate. Individuals with increasing net worth are often encouraged to invest in property, either as future residences or sources of passive income through rentals.
Some high-worth individuals, and even ultra-high-worth individuals, choose to buy luxury real estate for themselves. This is true for members of the upper and middle class who can afford to buy their own homes and live independently from their families.
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5. The “Balikbayan” Effect
Combining the purchasing power of foreigners with the privileges accorded by Philippine law to former citizens and residents, many Filipino immigrants from other countries have chosen to re-invest their hard-earned money on real estate, and especially luxury real estate. Some of their reasons for investing are the same as other demographics, but with added sentimental value.
Perhaps the balikbayan (Filipino: “back to the country”) has been priced out of reach from the real estate markets of their chosen countries. Or perhaps they have decided to retire in the Philippines after working abroad for years. Whatever their reasons may be, their time to invest in Manila’s high-end real estate market is now, while the purchasing power is still strong.
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Final Thoughts
More investors from around the world have Manila in their sights for luxury real estate. The economic situation is ideal for purchasing luxury properties in the city, and more developments in the pipeline from the largest real estate developers in the country could make the market even more attractive to investors.
The growing market in Manila could also influence luxury real estate markets outside the city as well. Real estate investors looking for properties outside the hustle and bustle of the city could seek out developments in resort towns such as Tagaytay and Cebu, not to mention rising suburban centers such as Nuvali in Sta. Rosa, Laguna.
With more developers and potential homeowners finding the best places to live in the Philippines, the demand for luxury real estate has the potential to extend past Manila, besides other cities within the metro. Ultimately, the growing demand for luxury real estate is about finding a place to call home, even if it is a long way from home.
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Read more about real estate in the Philippines.
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Featured image by Mezzo Realty
