A cursory glance at Asian commercial real estate transaction volumes shows which countries dominate the investment landscape. In the past decade, Japan, China, Australia and South Korea have accounted for the lion’s share of direct investment. Within Southeast Asia, Singapore is the sole heavyweight, making up at least 80 per cent of investment activity.
It is therefore not surprising that the Philippines gets little attention. Lacking the economic heft of Indonesia, the manufacturing prowess of Vietnam and the tourist appeal of Thailand, the Philippines often takes a back seat to its regional peers. However, it is at the forefront of important trends in the real estate industry, some of which are underappreciated and overlooked.
At a time when global house prices are rebounding, the luxury market in Manila is going gangbusters. According to a Knight Frank index of prime residential prices in 100 cities across the world, the Philippine capital recorded the fastest growth last year. Prices grew a staggering 26.3 per cent, even outpacing Dubai. Manila also held the top spot in the first quarter of this year.
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The combination of strong demand stemming from the sharp rise in the number of high-net-worth individuals and tight supply has driven up prices. The Philippines was Southeast Asia’s fastest-growing economy last year and has enjoyed annual growth rates in the past decade that have been almost on a par with India’s.
However, capital values are much lower than in the leading cities in Asia. According to Knight Frank, US$1 million bought 158 square metres (1,700 square feet) of prime residential property in Manila in 2022, compared with just 34 sq m in Singapore, 60 in Tokyo and 113 in Mumbai. The Philippine capital’s luxury market is booming but remains relatively affordable.
