MORE Filipinos in Metro Manila now prefer to rent a home than own one due to falling rental rates, according to property listing site Lamudi Philippines.
At an investor conference in Mandaluyong late last week, Lamudi Philippines managing director Jacqueline Van den Ende told investors there is growing interest in the rental market.
Van den Ende cited data from Google trends which showed that the number of searches for for-rent condominiums in the Philippines have been growing at a faster rate than for-sale condominiums.
“Condos for rent have been growing at a much faster rate versus condos for sale,” Van den Ende said.
On the sidelines of the forum, Van den Ende told The Manila Times that the increase in vacancy rates in Metro Manila is putting pressure on rental rates, which is making the rental market attractive to more Filipinos
“I think one of the key drivers here is the big inventory of unsold units. There’s a lot of inventory coming into the market, and that inventory is increasing vacancy rates,” Van den Ende said.
In a report, Colliers International noted that some 11,700 residential units will be completed by the end of this year, which is expected to further swell vacancy rates by the end of the year.
Colliers noted that vacancy rates in Makati are seen to rise to 10.8 percent in the next 12 months, while vacancy rates in Fort Bonifacio are expected to reach 9.6 percent.
“Increased vacancy rates are putting pressure on rental prices. So rental prices are going lower, and expected to go down. So that makes it an attractive rental market. The equation is shifting towards rental,” Van den Ende noted.
Colliers said rental rates in established business districts such as Fort Bonifacio and Makati are expected to go down this year.
“With the delivery of additional condominium units over the next 12 months, rental rates in Fort Bonifacio are projected to decline by 2 percent. Rental rates in Makati CBD, which will corner about 30 percent of the additional units this year, will decline by 3.2 percent,” Colliers said.
Van den Ende added that the relatively lower income of many Filipinos is also influencing the interest in for-rent condominiums.
She cited business process outsourcing (BPO) workers as an example of individuals who would prefer to rent a house since they cannot afford to buy one for now.
“[Most] BPO workers are renting. The average salary is P23,000. You can’t really spend P7,000- P8,000 [a month]on amortization so you can’t really buy a house. So people rent,” she said.
But she also made it clear that the interest in rental properties that she mentioned was only based on trends from online searches.
“What I see is online trends. I cannot draw hard conclusions. What we see here is in terms of online searches. We see a clear surge in condos for rents, over searches for condos for sale,” Van den Ende explained.