Philippines economy: Property market continues to boom
Rising demand for housing from the families of overseas Filipino workers and the rapidly growing business-process outsourcing (BPO) sector will drive demand for new residential and office units in the capital region, Metro Manila, in the coming period. Previous fears – engendered by high vacancy rates in office and residential property in 2011 – that the sector was oversupplied receded as vacancy rates fell over the course of 2012. The rate of new building is therefore expected to remain strong in the next four years, at a level similar to that in 2010-12.
According to Colliers International, a US-based real-estate consultancy, new units in high-rise residential towers will increase the stock of residential property by around 5% in the next four years, after new supply rose by more than 30% in 2010-12. This will raise the number of residential condominium units in Manila to 76,973 by 2016, from 53,314 at end-2012. Similarly, office space is expected to rise by almost 20% to 7.4m sq metres by end-2015, from 6.2m sq metres at end-2012, having expanded by an average of 17.5% a year in 2010-12.
Worries about oversupply of new residential and office units receded when vacancy rates fell in 2012. The residential vacancy rate declined to 10% at end-2012, from 10.5% a year earlier. Vacancy rates also fell in office towers in Manila’s main business districts, from 4.1% in 2011 to 3.5% at end-2012.
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