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The real estate market in Manila: 2024 forecast

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As we step into the year 2024, the real estate landscape in Manila continues to evolve, presenting both challenges and opportunities for investors, homeowners, and industry stakeholders.

In this article, we will give you a clear picture of what's happening in Manila's real estate scene for the year ahead.

If you need a full and more detailed report, with fresh data and actionable advice, please note that you can get our property pack for the Philippines. This pack will also give you unlimited access to our team of experts, allowing you to ask them anything related to the housing market in Manila specifically.

How's the Philippine economy doing?

Current state

Understanding the real estate market in Manila requires delving into various aspects, from the country's economic health and stability to specific government policies impacting housing.

Historically, the Philippines' economy has been dynamic, marked by periods of growth and challenges. This economic backdrop significantly influences the real estate market. In times of economic prosperity, you typically see a surge in property demand and prices.

Conversely, during downturns, the market often slows down. Manila, as the nation's capital and a major economic hub, often reflects these broader trends vividly.

The real estate market in Manila, and the Philippines in general, has experienced considerable growth over the years. This growth has been fueled by factors like urbanization, increasing overseas Filipino workers' remittances, and foreign direct investment.

The demand for various types of properties, from residential to commercial spaces, has been robust, particularly in key areas like Makati, Bonifacio Global City, and Ortigas Center.

Focusing on the housing market specifically, there's a notable demand for both high-end and affordable housing. This demand is driven by the growing middle class and the influx of expatriates and overseas Filipino workers.

However, affordability remains a challenge for many locals, a factor that the government has tried to address through various policies.

Government policies have historically played a significant role in shaping the housing market. These include tax incentives for developers, housing programs for low-income earners, and regulations affecting foreign ownership. Such policies can either stimulate or restrain the market, depending on their nature and implementation.

In more recent times, there have been shifts in these policies. The government has been attempting to address issues like housing affordability and the backlog in housing needs. Regulatory changes, such as adjustments in property taxes or modifications in foreign ownership rules, can directly impact the buying and selling of properties.

From a local perspective, Manila is indeed a popular area for real estate investment. The city's continuous development, the presence of multinational companies, and its status as a cultural and economic center make it an attractive spot.

The most sought-after areas for investment are typically those in or near business districts, like Makati and Bonifacio Global City, as they offer high rental yields and property value appreciation.

For foreign investors, there are specific incentives like the potential for high returns on investment due to the growing economy.

However, drawbacks include restrictions on land ownership and a complex bureaucratic process.

Comparatively, real estate prices in Manila can be more affordable than in other major Southeast Asian cities, but this varies widely depending on the specific location and type of property.

Lastly, the legal framework surrounding real estate investment in the Philippines is a crucial aspect. While there are efforts to make it more stable and transparent, challenges remain. Navigating the legalities requires due diligence and often, the assistance of local experts to ensure compliance and secure investments.

Outlook and forecast

Manila's real estate market has unique factors that distinguish it from other markets.

One significant factor is its dense population and limited land area, which creates a high demand for vertical developments like condominiums and mixed-use buildings. Another is the city's status as a cultural, economic, and political center, which continually attracts both local and international investors.

When we talk about forecasting Manila's economy and stability, it's a complex task. Based on historical trends and current economic indicators, the forecast seems cautiously positive.

The city has shown resilience in the face of global and local economic challenges. It's often experiencing faster growth compared to other regions in the Philippines, mainly due to its status as the nation's capital and a hub for business and commerce.

However, this growth is contingent on various factors, including global economic conditions, government policies, and local market dynamics.

Looking at potential government policy changes in 2024 that could impact the real estate market, it's important to monitor policies related to foreign investment, taxation, and infrastructure development.

For instance, any relaxation in foreign ownership laws could significantly boost the market by attracting more foreign buyers. Conversely, changes in property taxes or real estate regulations could either stimulate or dampen market activity.

Specific signs suggesting improvements in Manila include ongoing infrastructure projects like new highways, rail systems, and airport expansions. These projects can enhance connectivity and accessibility, making certain areas more attractive for real estate development and investment.

Also, the growth of the Business Process Outsourcing (BPO) industry and the increasing presence of multinational corporations are likely to drive demand for both commercial and residential properties.

However, potential risks should not be overlooked. These include natural disasters, like typhoons and earthquakes, which are relatively common in the Philippines. Political instability and changes in government policies can also pose risks.

For example, stringent regulations on foreign ownership or unfavorable tax policies could deter investors. Additionally, the risk of property oversupply, particularly in the luxury segment, could lead to a market correction.

If such risks materialize, the real estate market could face challenges. A natural disaster could temporarily halt market activity and lead to increased caution among investors. Political instability or unfavorable policies might reduce investor confidence, leading to a slowdown in market growth.

An oversupply, particularly in high-end properties, could lead to reduced prices and lower returns on investment.

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What about housing prices in Manila?

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Current state

In Manila, the trend in real estate prices over the past few years has been quite interesting.

Generally, there's been a steady increase in property values, reflecting the city's growing economy and urbanization. This trend isn't uniform across all property types or areas.

Looking at how real estate prices have reacted to economic crises or booms, it's clear that they are closely tied to the broader economic health of the country.

During periods of economic growth, such as the years leading up to 2020, there was a noticeable increase in property values. This was driven by factors like increased foreign investment and a growing middle class.

In contrast, during economic crises, such as the global financial crisis of 2008 or the COVID-19 pandemic, there was a temporary slowdown in the real estate market, with prices stabilizing or even declining slightly.

However, Manila's market has shown resilience, often bouncing back relatively quickly after such downturns.

Comparing current real estate prices with those from a decade ago, there's been a significant increase. This rise is attributed to several factors, including the city's ongoing development, increased demand for housing, and inflation.

Generally, property prices in Manila have trended upwards over the long term, making real estate a popular investment choice.

Currently, real estate prices are showing a trend of steady growth, though the rate of this growth varies by property type and location. The types of properties experiencing the highest growth in prices are often those in prime locations, such as business districts and areas with good infrastructure.

Condominiums and high-rise residential properties, in particular, have seen substantial price increases. This is largely due to the high demand for living spaces in central locations, driven by the city's dense population and the appeal of living close to work and urban amenities.

The population in Manila has been changing recently, with continued growth and an increasing trend towards urbanization. More people are moving to the city in search of employment and better living conditions. This demographic shift contributes to the trends in the real estate market.

The rising population density in the city drives the demand for residential properties, particularly affordable housing and mid-range condominiums. This demand, coupled with the limited land area for development, pushes property prices upwards.

These trends in Manila's real estate market are shaped by a combination of economic, demographic, and developmental factors. Understanding these trends requires a holistic view of the city's growth, challenges, and the evolving needs of its residents.

For anyone interested in the Manila real estate market, keeping an eye on these dynamics is crucial for making informed decisions.

Outlook and forecast

In Manila, several economic and demographic factors are currently influencing real estate prices.

One key factor is the city's population growth and urbanization. As more people move to Manila for work and better living conditions, the demand for housing increases, pushing prices up. This is especially true for properties in central areas and near business districts.

Another significant factor is the influx of foreign investment and expatriates. The presence of multinational companies and the growing Business Process Outsourcing (BPO) sector in Manila attract a large number of foreign workers. This increases the demand for both residential and commercial properties, contributing to higher real estate prices.

Regarding specific facts or trends that could lead to an increase in housing prices in Manila in the near future, the continued expansion of infrastructure projects, like new roads and public transport systems, could make certain areas more accessible and desirable, thus increasing property values in those areas.

Moreover, if the Philippine economy continues to grow and the middle class expands, there will be an increased ability and desire to invest in real estate, further driving up prices.

However, this scenario might not be uniform across all cities or regions in the Philippines. Other regions may experience different trends based on local economic conditions, infrastructure development, and population growth.

Conversely, there are also factors that could lead to a decrease in housing prices in Manila. One potential factor is the risk of oversupply, especially in the luxury property segment.

If too many high-end properties are developed without a corresponding increase in demand, this could lead to a market correction with falling prices.

Another factor that could negatively impact housing prices is political or economic instability. If investors perceive a risk due to political uncertainty or economic downturns, this could lead to a decrease in investment and a subsequent drop in real estate prices.

Natural disasters, which are not uncommon in the Philippines, can also have a short-term negative impact on property values, especially if they result in significant damage to infrastructure and properties.

These downward pressures on prices may not be uniformly experienced across the country. Some regions or cities might be more resilient due to stronger local economies, better infrastructure, or less exposure to natural disasters.

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How's the demand for the real estate market in Manila?

Current state

In Manila, the demand for residential real estate has been consistently high, driven by various factors including urbanization, population growth, and an increasing middle class.

The city's status as a business and commercial hub attracts both local and foreign residents, resulting in a strong demand for housing.

Currently, the market dynamics in Manila often show a scenario where there are more buyers than sellers. This is particularly true for certain types of properties and in specific locations. High-demand areas, especially those near business districts and commercial centers, tend to have more buyers competing for available properties.

Regarding the supply of new housing, developers have been actively responding to this demand. There has been a noticeable increase in the construction of high-rise condominiums and mixed-use developments.

However, the supply might not always perfectly match the demand, especially in terms of affordability and specific location preferences. The high demand for affordable housing remains a challenge, with many buyers looking for budget-friendly options.

Buyers in Manila are often looking for properties that offer convenience, such as those located near workplaces, schools, and amenities. Condominiums in central business districts are particularly popular among young professionals and expatriates. There's also a growing interest in gated communities and townhouses among families seeking more space and security.

The current interest rates for mortgages play a crucial role in shaping the buying power and demand of consumers. Lower interest rates make mortgages more affordable, thereby enabling more people to purchase homes.

Conversely, higher rates can restrict buying power and cool the market. The exact impact of interest rates on the real estate market can vary depending on broader economic conditions and individual financial circumstances of buyers.

Regarding government policies or regulations, changes in these areas can significantly impact the local real estate market. For example, any tax changes, such as adjustments in property or capital gains taxes, can influence the attractiveness of real estate investment.

Subsidies for homebuyers, particularly for affordable housing, can stimulate demand in that segment.

Zoning laws can also affect the market by determining what types of properties can be built in certain areas. These government actions can either stimulate or restrain the real estate market in Manila, depending on their nature and implementation.

Overall, the real estate market in Manila is dynamic and influenced by a combination of factors including consumer demand, housing supply, mortgage rates, and government policies. Keeping abreast of these factors is crucial for anyone interested in the Manila real estate market, whether as a buyer, seller, investor, or developer.

Outlook and forecast

Demographic shifts such as aging populations and urbanization are having a significant impact on the Manila real estate market.

Urbanization, in particular, is a driving force. As more people move into the city from rural areas seeking employment and better living standards, the demand for housing in urban areas increases.

This trend has led to a surge in demand for residential properties, especially apartments and condominiums that are well-suited to urban living.

The aging population also influences the market, though in a different way. There's growing interest in properties that cater to the needs of older adults, such as low-maintenance homes and communities with healthcare and leisure facilities nearby.

This demographic trend is gradually shaping the types of properties being developed and sought after in the market.

Current trends in household formation in Manila also play a role. There's a noticeable shift towards smaller family units, which influences the demand for certain types of properties.

Smaller apartments and condominiums are becoming more popular, especially among young professionals and newly formed families who prioritize location and convenience over larger living spaces.

In terms of real estate as an investment in Manila, there's a strong trend towards buying properties for rental income and capital appreciation. Condominiums in central business districts and near major transport hubs are particularly popular among investors due to their potential for high rental yields and appreciation in value.

Commercial properties, such as office spaces and retail units, are also sought after, especially in areas with high business activity.

Cultural trends are also influencing the housing market in Manila. For example, there's an increasing preference for modern, urban lifestyles, which boosts demand for properties in central locations with access to amenities like shopping centers, restaurants, and entertainment venues.

Regarding the purpose of buying properties, there's a mix of both investment-driven purchases and buying for personal use.

However, the investment aspect has gained traction, with many buyers purchasing properties with the intention of renting them out or selling them for a profit in the future.

Foreign investment plays a significant role in the Manila real estate market. Foreigners are typically interested in high-end residential properties and commercial investments. This demand from foreign investors can drive up prices for certain types of properties, particularly luxury apartments and condominiums in prime locations.

The Philippines has certain restrictions on foreign ownership of land, but foreigners can own condominium units, subject to certain conditions. This restriction shapes the types of properties that foreign investors can buy, leading to a higher demand for condominiums.

However, there are encouragements too, like the potential for high returns on investment, which makes the market attractive to foreign buyers.

Lastly, niche markets in Manila are experiencing unique trends. The luxury property market, for instance, caters to a small but high-value segment, often attracting affluent locals and foreign investors.

Eco-friendly homes and sustainable developments are also gaining popularity, driven by increasing environmental awareness and a preference for healthier, greener living spaces.

These niche markets, while smaller in volume, contribute to the diversity and dynamism of the real estate market in Manila.

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How's the rental market in Manila?

Current state

The demand for rental properties in Manila is quite robust, reflecting the city's status as a major urban and economic hub in the Philippines.

This demand varies based on property types, locations, and tenant demographics.

In terms of property types, apartments and condominiums are in particularly high demand, especially in the urban areas of Manila. These properties are popular due to their convenience, security features, and often, their proximity to business districts, shopping centers, and entertainment venues.

Shared accommodations, such as co-living spaces, are also gaining popularity among young professionals and students who are looking for affordable housing options in the city.

The features most sought after by tenants in rental properties vary but generally include location, size, and amenities. Location is typically the top priority, with properties located near business districts, schools, and public transportation being highly desirable.

The size of the rental unit is also important, with a preference for more spacious units among families and smaller, more affordable units among single professionals and students.

Amenities such as security, parking, swimming pools, and fitness centers are also highly valued, particularly in mid-range to high-end rental properties.

Tenant preferences do vary between urban, suburban, and rural areas. In urban areas, tenants often prioritize proximity to work, shopping, and entertainment, and are more likely to choose apartments or condominiums.

In suburban areas, there's a greater demand for single-family homes or townhouses, with tenants often seeking more space and a quieter environment.

Rural areas, while having a smaller rental market compared to urban and suburban areas, typically see a demand for single-family homes and may attract tenants looking for more affordable options or larger living spaces.

The demographic characteristics of tenants in Manila vary by region. In business districts and nearby urban areas, tenants often include young professionals, expatriates, and small families. These areas are characterized by higher income levels and a preference for convenience and lifestyle amenities.

In suburban areas, tenants are more likely to be larger families or older couples looking for more space and a quieter environment. The rural rental market is smaller and often includes local families or individuals seeking affordability.

Income levels and economic factors greatly influence the type of properties tenants are renting. Higher-income individuals tend to rent in central urban areas, opting for properties with more amenities and higher rental rates.

Middle-income tenants often look for a balance between affordability and convenience, while lower-income tenants are more cost-conscious and may choose more affordable options further from the city center.

Certain regions in Manila have a high concentration of specific tenant groups. For example, areas near universities have a high concentration of students, while business districts are popular among young professionals.

Some suburban areas might attract more families and retirees who are looking for a quieter lifestyle away from the hustle and bustle of the city center.

Overall, the rental market in Manila is dynamic and diverse, catering to a wide range of tenant needs and preferences. This market is influenced by various factors including location, property type, and demographic trends, reflecting the diverse and ever-changing landscape of the city.

Outlook and forecast

The rental market in Manila is influenced by several key factors, with evolving lifestyles and work patterns being significant drivers.

Firstly, the COVID-19 pandemic has accelerated a shift towards remote work, altering tenant preferences. There's an increased demand for rental properties with home offices, leading to a preference for larger spaces in quieter, both urban and suburban, neighborhoods.

Secondly, demographic changes are shaping the rental market, driven by a growing young population and a rising number of expatriates. High demand is noted for rental properties near business districts, entertainment hubs, and lifestyle amenities, favoring apartment living, especially condominiums with modern amenities.

Emerging urban areas in Manila are becoming new hotspots for rental properties. Areas like Bonifacio Global City and the Bay Area are increasingly popular due to their modern infrastructure, access to amenities, and proximity to business centers.

These areas are attracting a mix of young professionals, expatriates, and families, driving up the demand for rental properties.

Technological advancements are also impacting the rental market. The rise of online property platforms has made it easier for tenants to search for and secure rental properties. These platforms offer virtual tours, streamlined application processes, and a broader range of options, enhancing the overall rental experience.

There's a growing trend towards sustainability and green living in Manila's rental market. More tenants are looking for eco-friendly homes, leading to a demand for properties with features like energy-efficient appliances, green spaces, and sustainable building materials. This trend is more pronounced in the mid to high-end rental market.

The rental market forecast across different regions of the Philippines varies. In major urban areas like Manila, demand remains high due to urbanization and economic opportunities.

In contrast, more rural areas may have a lower demand for rentals, with preferences leaning towards traditional housing.

The long-term outlook for the rental market in Manila is generally positive, considering these factors. The demand for rental properties is likely to remain strong, driven by urbanization, demographic changes, and evolving work and lifestyle patterns.

However, this demand will increasingly shift towards properties that can cater to the needs of a modern, urban population, including features like flexible living spaces, modern amenities, and sustainability.

Finally, niche markets in Manila are experiencing unique trends. The luxury rental market remains robust, catering to high-income individuals and expatriates who seek premium living experiences.

Eco-friendly homes are also carving out a niche, appealing to environmentally conscious tenants. These trends indicate a diversifying rental market that caters to a wide range of preferences and needs.

Make sure you understand the real estate market in Manila

Don't rush into buying the wrong property in the Philippines. Sit, relax and read our guide to avoid costly mistakes and make the best investment possible.

real estate market Manila

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.