Demand for luxury condos on the rise

Accounting for 34 percent of total take-up in 2022, the luxury condominium segment is making a comeback this 2023.

According to Colliers Philippines, the demand for expensive properties is seen to improve this year, as property sellers observed rising demand from buyers, both Filipinos and foreign nationals, despite rising interest and mortgage rates.

Colliers' data shows that demand in the luxury condominium segment rebounded in 2022. During the period, luxury condo units (those priced at PHP8 million and above or USD145,500 and above) accounted for 34 percent of total take-up, up from only five percent in 2022.

Joey Roi Bondoc, Director of Research at Colliers explained that the previous crises have affected demand for residential projects especially in Metro Manila, resulting in a price correction.

However, historical data would show that the luxury segment is resilient, exhibiting stability amid an economic crunch and showing signs of immediate recovery after global financial meltdowns, Bondoc said.

“Colliers believes that the luxury and ultra-luxury segments will likely remain resilient despite rising interest and mortgage rates,” Bondoc added.

Continued improvement of the infrastructure backbone will also play a crucial role in lifting the prices of condominium projects across the capital region, particularly the luxury and ultra-luxury units.

Increasing land values and prices of construction materials will also likely compel developers to launch more high-priced residential units.

In Cebu, aside from robust sales of middle-range residential properties in Cebu, buyers are starting to look for luxury residential projects.

The rising interest of luxury and upscale property buyers in Cebu in the post-pandemic era is confirmed by Filipino Homes founder Anthony Gerard O. Leuterio, saying the real estate particularly in Cebu has benefited the “revenge spending” of both local and foreign buyers.

According to Leuterio, people are now realizing that the real money is in real estate and that real estate investments including the acquisition of luxury properties are seen to expand further moving forward.

“There are so many scams already,” said Leuterio mentioning the collapse of the recent crypto investments, and other investment instruments which gained minimal yield. Yet, real estate remained sound even with the pandemic.

Amid the inflation, and economic global economic uncertainties, Leuterio said people who have money, even those who are able to save are spending now, and real estate is top on their list in terms of investing.