Colliers Philippines said the luxury condominium market is poised to perk up as the economy rebounds, lifting demand for upscale and luxury dwellings.
“Improving business and consumer sentiment should further propel take-up and positively influence prices across the capital region. We see a gradual price recovery starting 2023 which should offset corrections in the market caused by an unfavorable economic situation in 2020 and 2021,” Colliers said.
Citing its own data, Colliers said the segment was able to rebound last year, with the P8 million and up price points accounting for 34 percent of the condominium take-up, improving from just 5 percent the prior year.
Take-up in 2022 was driven by projects located in major central business districts (CBD) such as Fort Bonifacio, Bay Area and Ortigas, Colliers said, noting that the luxury and ultra-luxury segments will likely remain resilient despite rising interest and mortgage rates.
“In our view, the continued improvement of Metro Manila’s 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. Colliers projects an aggressive launch of luxury units in the CBDs as well as Metro Manila outskirts,” it added.
Colliers also noted that recent launches by major developers now primarily cater to the affluent market. About a third of newly launched units last year are classified as upscale to ultra-luxury.
“In our view, investors prefer these luxury units due to capital appreciation potential and are a viable hedge against inflation. A constant rise in land values coupled with surging prices of construction materials also compel developers to focus on the more expensive spectrum of Metro Manila’s condominium market,” it said.
