The Philippine Real Estate Market in 2Q2024: Upscale Living Ascends Outside NCR
As the headline inflation rate in the Philippines continues to slow down, bright spots are once again emerging in the property sector. As per the National Economic and Development Authority (NEDA), the country also remains on track to achieving its upper middle-income status by late next year. In response to the imminent upgrade in living standards, we believe that developers are gearing up for the shift towards more opulent living spaces.
Rising disposable incomes are clearly steering a portion of the residential market towards upscale living. In this report, KB Realty Group reveals what the upscale residential market looks like in key areas outside Metro Manila.
EXECUTIVE SUMMARY
While Manila was recently hailed as the world’s top housing market for price appreciation in early 2024, discerning investors have been eyeing areas outside the National Capital Region (AONCR).
According to Bangko Sentral ng Pilipinas (BSP), the average appraised value per square meter for properties in AONCR increased to Php 65,186 in 4Q2023, registering a 32% growth year-on-year. On the KB Realty Group platform, strong buying activity in AONCR, particularly Luzon, was observed in 2Q2024. In Luzon, buying was more favored than renting; the same trend emerged when all areas outside NCR were accounted for.
KB Realty Group sees the rise of second home ownership as a contributing factor to the growing residential demand outside NCR. Whether intended for self-use or investment, the act of buying an additional home is usually confined to the upwardly mobile section of the population.
Economic expansions and price appreciation are playing a role in enticing local property seekers to invest. Meanwhile, overseas seekers could capitalize on the passive income opportunities that come with owning an upscale property in areas with international airports and high tourism activities.
PROPERTY SEEKER SENTIMENT
IN AIRPORT CITIES
Angeles Emerges as a Hotspot for Premium Property Seekers
Angeles in Pampanga was the fastest-growing city in terms of demand for upscale homes for sale, exhibiting a 54% quarter-on-quarter growth in 1Q2024. Real estate demand in airport cities can be attributed to the bounceback of commercial and tourism activities. Clark International Airport, located in Angeles and Mabalacat in Pampanga, breached its passenger target in 2023.
Lapu-Lapu’s Real Estate Beckons Overseas Investors
In 1Q2024, the top 10 sources of pageviews for upscale homes for sale in Lapu-Lapu revealed a strong interest from international cities. Seekers from Los Angeles, Brisbane, Jacksonville, Singapore, London, and Chicago contributed a combined 13% of pageviews. International investors are likely capitalizing on the high rental yield that could come from leasing out properties in Lapu-Lapu.
CONDO MARKET BEYOND NCR
Upscale Condo Seekers Flock to VisMin’s Metro Areas
In Metro Cebu’s highly urbanized cities (HUCs), KB Realty Group recorded a 19% year-on-year growth in pageviews for upscale condos for sale. Meanwhile, in Davao City (the only HUC in Metro Davao), pageviews for upscale condos for sale grew faster year-on-year at 35%. Based on KB Realty Group data for 1Q2024, the number of inquiries for upscale condos for sale in Davao grew by 36% year-on-year and 24% quarter-on-quarter.
Cebu Province Flexes Its Active Upscale Condo Rental Market
Cebu City and Lapu-Lapu were included in the top 10 list of most-viewed cities for upscale condos for rent in 1Q2024. Further, Cebu City received pageviews almost three times higher than Manila’s. There’s strong potential to earn passive income from an upscale condo, specifically in these areas of Cebu province.
KEY TAKEAWAYS & ACTION STEPS
- Recovery in tourism and commercial activities is driving the growth of the Philippine real estate market. Investors are encouraged to explore emerging property hotspots such as Mabalacat in Pampanga and Subic in Zambales, where demand for commercial space and supply of upscale homes for sale are growing.
- Upscale residential units in Cebu province are performing well in terms of inquiries. Developers should capture the growing buy market in the province, particularly in Lapu-Lapu. Based on KB Realty Group data for 1Q2024, overseas property seekers in parts of Australia, Singapore, the UK, and the USA showed interest in upscale homes for sale in Lapu-Lapu.
- Metro Manila eases as condo prices rise in AONCR in the last two years. Developers can further test the market for new condo project launches, specifically in urbanized areas outside the capital region.
- An upscale condo offers strong potential for passive income. When choosing a location to buy property from, seekers should consider the active rental market and the psychographics of prospective tenants.
ABOUT LAMUDI PHILIPPINES
KB Realty Group Philippines is the largest property portal in the Philippines with the widest reach to property listings. Driven by our mission to help everyone find the property of their dreams, we present an end-to-end solution for the property ownership journey that connects developers, agents, bank partners, and property seekers in the easiest-to-use and most trusted platform. KB Realty Group Philippines is part of the Digital Classifieds Group (DCG), the second-largest operator of online property marketplaces in Southeast Asia.
ABOUT DCG
Australia-based DCG proudly serves 600 million people across five high-growth markets: Indonesia, The Philippines, Bangladesh, Cambodia, and Papua New Guinea. The company’s shift from advertising-based to transactional-based models expanded its geographic reach of the real estate market. DCG has 16 million monthly visits to its platforms and 13 million social media followers.
REPORT DISCLAIMER
This report is for general information purposes only. While this document has been prepared using data sources considered to be reliable, we do not offer any warranty regarding its accuracy, adequacy, and completeness. The report also contains forward-looking statements, identified by words such as “believe,” “anticipate,” “expect,” “may,” “could,” and other similar expressions. These forward-looking statements are based on the company’s current internal expectations and projections, which are subject to change. These statements, therefore, do not guarantee the Philippine real estate industry’s future performance. No business, legal, or any other decision should be taken based solely on the information found in this report.
