Philippines becomes world’s hottest luxury housing market as developers push million-dollar homes

Property

Major real estate companies are accelerating the development of luxury residential projects in the Philippines and introducing more million dollar homes to tap resilient demand from both affluent local and foreign buyers in the world’s best-performing prime housing market.

Prime residential prices in the Makati financial district and nearby towns climbed 26% in the 12 months through March 2024, the biggest jump among 44 cities tracked by Knight Frank in the Prime Global Cities report published in May. The growth can be attributed to the Philippines’ robust economic performance (among Southeast Asia’s fastest growing economies), as well as significant infrastructure investments in and around Metro Manila, according to the British property consultancy.


Hot Property
Luxury homes in the Philippine metropolis topped the ranking of 44 prime global cities tracked by Knight Frank.

Source: Knight Frank

Tapping on rising consumer confidence in the country, Ayala Land started marketing last year its most luxurious project, Park Villas, a 51-story residential condominium at the heart of the Makati central business district. With a price tag of about 500 million pesos ($9 million), future residents of the 45 single floor apartments measuring 610 square meters each, will have unobstructed views of the Ayala Triangle Gardens, which houses the headquarters of Ayala Corp, the country’s oldest conglomerate controlled by billionaire Jaime Zobel de Ayala and his family. About 20% of the project has been sold so far.

ATG Tower 2
The Ayala Triangle Gardens Tower 2, which serves as the headquarters of Ayala Corp, is across the street from where the ultra luxurious Park Villas residential tower is being built.Courtesy of Ayala Land

“Rising wealth in high net worth and affluent households is driving demand for premium residential segment,” Anna Maria Margarita B. Dy, president and CEO of Ayala Land, said in reply to Forbes Asia’s queries. Of the 76 billion pesos worth of residential projects Ayala Land launched for sale in 2023, 88% catered to the premium segment.

Demand for high-end properties in the Philippines has picked up even during the pandemic, with the billionaire Gokongwei family’s Robinsons Land and joint venture partner, Shang Properties of Malaysian tycoon Robert Kuok, selling 83% of the 285-unit Aurelia Residences luxury condominium as of end-2023. The 55-story skycscraper, which has been under construction since 2019 and expected to be completed this year and turned over to future residents in the next two years, is located at the heart of the Bonifacio Global City, just outside the Makati financial district. The three-bedroom units measuring 240 square meters to 349 square meters each are selling for between 120 million pesos to 210 million pesos.

Aurelia Facade Render (Day)-01<a href=
An artist impression of the 285-unit Aurelia Residences, a luxury condominium project being jointly developed by Robinsons Land and Shang PropertiesCourtesy of Shang Properties.

“There are a number of factors that are pushing up the value of luxury projects in the Philippines,” Lance Gokongwei, president and CEO of Robinsons Land’s parent JG Summit, said by email. “The economy has certainly shown resilience and growth post-Covid, infrastructure projects are booming, and the Philippines also sits in a very strategic location in Southeast Asia, close to many of the large regional hubs.”

Megaworld—controlled by billionaire Andrew Tan, who pioneered the living concept of a city within a city in the Philippines—is also focusing on high-end residential developments, with around 80% of its projects catering to upper middle and upscale segments. The company plans to start marketing 10 new residential projects (with projected sales value of 40 billion pesos) this year, including Tower Two of Uptown Modern at the Bonifacio Global City. Uptown Modern’s 54-story Tower One was launched at an average price of 420,000 pesos per square meter, with the largest units measuring about 200 square meters selling for about 84 million pesos.

“We see real estate sales and demand sustaining its trajectory through the year,” Kevin Tan, CEO of Megaworld’s parent Alliance Global Group, said by text message.


“The stronger dollar and weaker peso positively impacted residential demand.”


Having booked 36.5 billion in reservation sales in the first quarter, Tan said Megaworld is on track to achieve its 145-billion-peso target for the whole year despite rising borrowing costs and the peso’s depreciation. With about 29% of company’s housing revenues coming from overseas buyers, he believes the stronger dollar will help boost demand.

Uptown Bonifacio - (Photo by Carlo Sule) (1)
The Uptown Modern condominium at the heart of the Bonifacio Global City.Courtesy of Megaworld

“The stronger dollar and weaker peso positively impacted residential demand, making our properties more attractive to overseas Filipinos whose foreign currency earnings now have greater purchasing power,” Tan said. “However, this is just one aspect of our growth. The significant improvement in international sales for Megaworld is largely due to our strategic efforts to expand our sales force overseas and implement innovative means to reach untapped international customers.”

Vista Land—which has traditionally focused on horizontal housing developments including the 349-square-meter bungalows selling for about 82 million pesos each at Portofino, an Italian-inspired residential enclave in the southern Metro Manila municipality of Alabang—is diversifying into vertical residential projects to maximize its landbank across the Philippines. It has so far launched 10 billion pesos worth of high-rise condominiums in the first quarter, about 25% of its target for the whole year. “We remain optimistic with the industry as we continue with our project launches,” billionaire Manuel Villar, chairman of Vista Land, said by email.

Portofino
An Italian-inspired house at Portofino, a luxury residential enclave developed by Vista Land in the southern Metro Manila municipality of Alabang.Courtesy of Vista Land

This article was first published on forbes.com and all figures are in USD.

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