Metro Manila has seen the highest price growth in luxury residences compared to the rest of the world which could be sustained by better economic forecasts for the Philippines, global property consultant Santos Knight Frank said Friday. Metro Manila prices for the luxury segment jumped by 21.2 percent, higher than Dubai’s 15.9 percent, Shanghai’s 10.4 percent and Mumbai’s 6.5 percent in 12 months. Even lower growth was seen in Madrid (5.5 percent), Stockholm (4.7 percent) and Seoul (4.5 percent). “Strong investor confidence in the Philippines during the current Ferdinand Marcos Jr. administration has buoyed the real estate market despite rising interest rates,” SKF chief executive officer Rick Santos told the media on Friday. S&P Global Ratings recently raised its economic forecast for the Philippines for the entire year to 5.4 percent, higher than Vietnam’s 4.9 percent, Malaysia’s 4 percent, Thailand’s 2.5 percent, and South Korea’s 1.3 percent. Pent-up demand He added the global recovery from the pandemic has caused “pent-up demand for prime properties and the return of the residential leasing market.” Previous lockdown periods also pushed up prices as delayed construction of properties resulted in “tight supply especially in the business districts.” Santos said the robust business activities in the Philippines, especially in the business process outsourcing and promising energy and industrial sectors, have helped drive demand for its real estate among foreign investors. He said they are mostly Japanese, Americans, and Indians. The office vacancy rate in prime buildings fell to 17 percent in the third quarter, lower than the 20 percent average. PEZA- approved foreign investments Meanwhile, the Philippine Economic Zone Authority has approved foreign investments amounting to P27.3 billion, which also covers manufacturing and electronics. “Industrial is a vital link to retail. In the first half of 2023, Manila’s warehouse lease rates jumped by 30 percent -— the highest in Asia Pacific — driven by supply chain, e-commerce, and retail activities,” Santos said. He added the effects of geopolitical tensions, including China’s slow recovery and trade issues with its neighbors and the United States, have benefited the Philippines. “Now that there’s instability in investment markets and property markets in China and Hong Kong, we are seeing a pivot in the number of investors and occupiers coming to Southeast Asia, mainly the Philippines,” he said. Santos said “second homes” in areas near Metro Manila could also rise as people grow their income and seek vacation spaces and investment opportunities. SKF data show 41 percent of condominium units sold in Luzon were leisure developments located in tourist areas, such as Tagaytay and Batangas. The rest or 59 percent are located in Cavite, Batangas, Laguna, and Pampanga. “This trend is likely to continue in 2024, with local buyers acquiring leisure properties in Metro Luzon either for their end use or investment,” its report said. Read more Daily Tribune stories at: https://tribune.net.ph/ Follow us on social media Facebook, X, Instagram & Threads: @tribunephl Youtube: TribuneNow TikTok: @dailytribuneofficial Related