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Residential Property Market Overview - Philippines

General Economic Overview

Economic growth has averaged 5% since President MACAPAGAL-ARROYO took office in 2001. MACAPAGAL-ARROYO averted a fiscal crisis by pushing for new revenue measures and, until recently, tightening expenditures. Declining fiscal deficits, tapering debt and debt service ratios, and increased spending on infrastructure and social services bolstered optimism over Philippine economic prospects. Although the general macroeconomic outlook improved significantly in recent years, the economy still faces several long term challenges. The Philippines must maintain the reform momentum in order to catch up with regional competitors, improve employment opportunities, and alleviate poverty.

The Philippine economy grew at its fastest pace in three decades in 2007 with real GDP growth exceeding 7%, but growth slowed to 3.8% in 2008 as a result of the world financial crisis. High government spending, a relatively small trade sector, a resilient service sector, and large remittances from the four- to five-million Filipinos who work abroad have helped cushion the economy from the current financial crisis.

Residential Property Market Overview

  • With no new residential condominiums expected to complete this year, vacancy should remain close to 10% until 2010. Nevertheless, CBD-wide vacancy continues to inch up, now at 9%, as tenant movements observed late last year become more apparent. Non-luxury condominiums led the rise in vacancies in Q1.
  • CBD-wide rental rates for luxury 3BR units marginally declined by 1.4% to P575/sqm or around P143,750 monthly for a 250-sqm unit. Rockwell and Bonifacio Global City luxury condominium rents are unchanged.
  • Makati CBD average prices of luxury residential condominiums are virtually flat at P101,000/sqm. Prices of condominiums in the secondary market will be pressured in the next few months as other developments complete. On the other hand, a downbeat trend in the primary residential market will likely be observed in the next six months at least as well.


No residential condominium completion is expected in Makati CBD in 2009. The number of condominium units in Makati CBD will remain at 12,015 units until next year when five condominium projects are expected to complete. Most of the future residential developments in Makati are luxury condominiums; most notable are Raffles Residences, which is under construction, and the proposed Discovery Primea. From 2009 to 2012, Makati CBD will have added more than 5,000 new residential condominium units.

Developments elsewhere are not slowing down either, with Bonifacio Global City filling up its open space with at least 25 condominium projects completing in the next 48 months. Rockwell and Ortigas Center are also expecting not less than eight new condominiums in the next three years combined. While high-rise residential developers are showing prudence in their projects and plans this year, building and completing over 20,000 units in the next 48 months is still very tough for Metro Manila demand to accommodate.


CBD-wide residential condominium vacancy inched higher to 9% in Q1 from 7.7% at end-2008. The notable increase in vacancy came from older buildings that are currently competing against newer condominium developments. Non-luxury condominiums vacancy rose to 12.7% from 10.6% in Q4. Tenant movements observed late last year are becoming more apparent as more units become available. Vacancy is expected to maintain its current level, possibly hitting double digits at some point, with no completions in the next nine months.


Residential rents for luxury 3-BR units in Makati CBD marginally declined by 1.4% to P575/sqm or around P143,750 monthly for a 250-sqm unit. As anticipated, demand for larger sized condominium units in Makati diminishes and adjustments in rents are starting to be seen. New residential projects that are completing in many areas in Metro Manila will also continue to put downward pressure on rents in older condominium buildings in Metro Manila.

On the other hand, luxury residential condominiums in posh Rockwell Center continue to enjoy the same rental rates observed in Q4 2008. Vacancy in Rockwell remains below 5% and this has helped sustain its average rental rates at P684/sqm that translates to P154,000 monthly for a 225-sqm unit. On a per square meter basis, Rockwell has the most expensive condominiums to rent.

Luxury residential 3-BR average rent in Bonifacio Global City is barely unchanged over Q1 at an average of P625/sqm or more than P180,000 per month. Big-sized 3-BR units in BGC are almost fully occupied at any given time. Expectations remain positive for this segment; rentals for luxury 3-BR units in BGC are most likely to resist significant downward pressure this year. Smaller unit rentals, however, are not immune to supply-induced downward pressures.

2009 - 2010 Estimation

The Housing and Urban Development Coordinating Council (HUDCC) estimated that there are about 3.8 million housing backlog (including projected yearly new households) in the country for the period 2005-2010.

This huge unmet demand will help sustain activities in the real estate sector in the coming years. In fact, developers remain upbeat about residential property market. Phinma Properties Incorporated, for instance, is scheduled to launch four residential projects targeted for middle-income earners this year.

The low-income housing market is also thriving. One of the contributing factors to this is the reduction in PAGIBIG Fund interest rates which has made housing much more accessible. For instance, interest rate for a housing loan package amounting to P750,000 has been reduced to 7% from 10%, translating to almost P1600 savings in monthly amortization. The Presidential Management Staff estimates that every peso spent in the housing sector creates P16.61 expenditure on other sectors of the economy.

In terms of job generation, it is estimated that 8.3 persons are employed for three weeks for every house built.

However, analysts are one in saying that the high-end condominium segment would most likely be affected by the economic slowdown. Most of the buyers of this segment come from the US which has been severely affected by the crisis. Those who buy condominiums as an investment may also postpone their purchases. Wage increases and profits from stock investments which have supported housing price growth in 2007 have basically disappeared. Developers postpone the introduction of new luxury projects as home-buying activity continues to weaken.


  • Real Estate Industry: Enduring the Effect of the Global Financial Crisis, Congressional Planning and Budget Department House of Representatives
  • Market Reports -
  • Rent Accommodation Online -

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  • includes additional Manila property agents listing