DEMAND from foreigners, specifically Asian investors, is sustaining the growth momentum of the luxury and high-end residential market, Santos Knight Frank President and CEO Rick Santos said on Thursday.
“The luxury and high-end residential markets are set to grow as interest from foreign investors, high net worth individuals and developers continues to increase,” Santos said in a briefing in Makati City.
Investors from China, Japan, South Korea, Singapore, Indonesia, Hong Kong and Malaysia are fueling the luxury property market, the property consultancy firm said.
Of the 34,143 high-end residential units that came on stream in the market, 77 percent has been purchased.
“While demand is driven by foreign investors, Santos Knight Frank noted that the low interest rate environment, flexible payment schemes and the weaker peso also attracted affluent end-users to acquire properties,” Santos added.
The luxury market “was underserved in the past. Developers have focused on scalability,” said Kash Salvador, associate director for Investment and Capital Markets at Santos Knight Frank.
“They understand that majority of Filipinos belong to the middle-income segment in terms of the bracketing and then developers have focused mostly on that segment and taking advantage of the lower land values outside Metro Manila,” he added.
Today, the market is seeing an increase in the number of properties. Ten luxury residential projects to be
completed in the next two to four years are in the pre-selling and construction stage with an overall absorption rate of 86 percent.
A total of 3,290 units have been launched in Metro Manila, 58 percent of which is in Taguig City, 21 percent in Makati City, 17 percent in Ortigas in Pasig City and 3 percent in Alabang.
Taguig City has the highest momentum with a 96.6 percent absorption rate, followed by Makati City with 89.4 percent, Alabang with 60.4 percent and Ortigas with 48.3 percent.
Constructing high-end residential properties are Rockwell Land Corp., Shang Properties Inc., Megaworld Corp., Filinvest Land Inc. and Ayala Land Premier.
Makati City has the most expensive high-end properties ranging from P145,000 to P185,000 per square meter (sqm). Taguig City is offering P155,000 to P179,000 per sqm; Quezon City, P120,000 to P145,000; Ortigas, Pasig City with P123,000 to PP163,000; and Bay Area, P130,000 to P158,000.
Among the upcoming luxury developments this year are The Albany of Megaworld, near Forbes Park and McKinley West in Makati City. It will cost about P300,000 per sqm. The P5 billion SMDC and Federal Land Partnership is 3,500 per sqm between Discovery Primea and Ritz Towers, which is envisioned “to be the most beautiful skyscraper in the country.”
Santos Knight Frank is part of the Knight Frank network, operating from more than 400 offices in 60 countries across the globe.