The weakening of the Philippine peso against the US dollar may bode well for the residential property market as it could lead to a stronger demand driven by the higher spending power of overseas Filipinos, real estate services firm Jones Lang Lasalle (JLL) said.
In a report JLL noted that the strengthening of the US dollar against the Peso may give overseas Filipinos opportunities to buy residential properties.
Last Thursday, the Philippine Peso hit the P50:$1 level intraday, the weakest since November 2006.
Excluding potential demand from overseas Filipinos due to the Peso depreciation, JLL noted that it sees demand for residential properties driven by investors in the coming quarters.
“Demand is expected to continue posting positive growth in the coming quarters on the back of continued investment interest,” the report said.
The report also noted that demand for residential units in the third quarter of 2016 remained stable as approximately 1,500 residential units were absorbed during the quarter.
“The majority of residential units in the leasing market in Makati CBD and Bonifacio Global City were taken up by expatriate employees from the offshoring and outsourcing industry and by high-income Filipinos,” JLL said.
The strong demand for residential properties in the third quarter was reflected in the Residential Real Estate Price Index of the Bangko Sentral ng Pilipinas.
In October, the BSP reported that residential property prices in April to June increased by 11.3 percent from the previous year.
JLL also reported that rents for residential properties continued to rise in the third quarter of the year by 3.6 percent year-on-year to P788 per square meter per month and 1.1 percent quarter-on-quarter.
Similarly, capital values rose by 5.9 percent year-on-year and 1.6 percent quarter-on-quarter to P161,900 per square meter.
“The faster growth of capital values continued to contract yields to 5.8 percent,” JLL said.
On a regional basis, the real estate services firm noted that Manila was among the luxury residential markets in Asia Pacific that saw a price growth above 1 percent quarter on quarter.
Other markets that saw price growth during the quarter were Beijing and Shanghai.