Colliers: Luxury condo segment resilient

GLOBAL real estate management firm Colliers said the luxury condominium market rebounded in the first nine months of 2022.

Research head and Associate Director Joey Bondoc said during the period that the luxury segment (properties priced at P8 million and above) accounted for 28 percent of total condominium take-up, up from negative 1.6 percent in the first nine months of 2021.

“The take-up was mainly driven by projects located in major central business districts such as Fort Bonifacio and Ortigas as well,” Bondoc explained. “We believe that the ultra-luxury segment will likely remain resilient amid the rising interest and mortgage rates.”

Latest data from the global firm also showed that overall, pre-selling condominium take-up reached 6,100 units during the third quarter of 2022, up from 5,700 units sold in the second quarter of 2022. This brings a total take-up of 14,900 units in the first nine of months 2022, already outpacing fullyear 2021 figures.

In 2021, Colliers recorded anemic take-up in the pre-selling market with only about 12,400 units sold. Colliers believes that residential demand should be supported by improving consumer and business sentiment in Metro Manila.

“Despite higher interest rates, we have seen a stable demand for upscale to ultra-luxury condominium projects in Metro Manila,” Bondoc remarked.

Colliers noted that over the past few years, there has also been a healthy level of price increases for these residential projects. On a per-square-meter basis, Metro Manila’s luxury and ultra-luxury condominium prices are starting to catch up with the region’s most expensive.

This comes as the Bangko Sentral ng Pilipinas (BSP) forecasts consumer and business outlook to improve to 50.3 percent and 60.6 percent, respectively, over the next 12 months from –7.4 percent and 27.9 percent, respectively in this year’s third quarter.

“We believe that the increase in prices will only result in investors and end users looking for greater amenities as well as innovative facilities,” Bondoc pointed out. “Due to Metro Manila traffic, there will be greater demand for connectivity to master-planned communities and topnotch concierge services.”

He concluded that luxury and ultra-luxury projects will also likely benefit from the reopening of Philippine tourism and the return of foreign employees and as well as resilience of the Philippine economy.

“The luxury and ultraluxury condominium segments showed resilience during the pandemic. Hence, it will not be surprising to see these developments proliferating in the near to medium term as the Philippines continues to further open up,” Bondoc said.