Prices of residential condominium units in Metro Manila’s major central business districts (CBDs) rose by an average of 43 percent in the last five years, according to real estate analyst Colliers International Philippines.
In its latest quarterly report on Metro Manila’s residential property sector, Colliers revealed that the average price of actively selling projects in four major CBDs grew to Php161,700 per square meter in the first quarter of 2018 from Php113,100 in the first quarter of 2013. The four CBDs covered by the study included Makati, Bonifacio Global City (BGC), Ortigas and the Bay Area.
The five-year growth translates to a compound average annual growth rate (CAGR) of seven percent between 2013 and 2018. CAGR is a measure of constant return over a period of time.
Of the four CBDs, the Makati business district showed the highest growth rate of 92 percent from Php123,000 per square meter in the first quarter of 2013 to Php235,600 per square meter in the first quarter of 2018. The equivalent CAGR is 14 percent.
BGC posted the second highest rise in residential condo prices, going up by 52 percent from Php112,800 per square meter in the first quarter of 2013 to Php171,600 per square meter this year. Condo prices had a CAGR of nine percent.
Not far behind is the Bay Area, where average unit prices stood at Php162,300 per square meter, up 46 percent from Php111,300 per square meter five years ago. The CAGR is eight percent.
Average condo prices in Ortigas rose 29 percent between 2013 and 2018 or from Php99,600 per square meter to Php128,400 per square meter. That translates to a CAGR of five percent.
“The noted price increases across the Metro Manila market was not surprising as pre-selling numbers continue to show positive results,” wrote Colliers in the report. It added that “the most expensive condominium in Metro Manila is now priced close to Php400,000 per square meter,” saying that the Php400,000 mark will be breached very soon.
While all four CBDs have already experienced massive price growth in the past five years, the forecasts show no signs of it stopping anytime soon. In the report, Colliers forecasted that Makati and the Bay Area will see even higher demand for condominiums due to “companies acquiring residential units for their employees in these submarkets, augmented by the presence of Chinese nationals.”
“It must be stressed that it is still a very competitive condominium market,” added Colliers.
Lorenzo Kyle Subido is a staff writer of Entrepreneur PH