Manila’s residential condominium market remains stable

The residential condominium market remains stable with no price hikes being seen across Metro Manila, according the second quarter review by CBRE Philippines.

Compounded annual escalation rates from 2008 to 2012 yielded a range from 6%-12% depending on the location, project quality and price scheme, said CBRE.

The market review noted the higher end of the spectrum was garnered by emerging business districts given that there is more room for development.

Loan-to-value ratios for the country move steadily at a range of 70% to 90%, which is a sign of strong liquidity in the Philippine banking system along with low interest rates.

CBRE said the unique nature of the domestic real estate market is its high sensitivity to real market demand. For instance, residential transactions for investment aim to get the highest yields from rent.

Encouraging economic figures has turned all eyes to the Philippines with global and BPO firms stimulating the office market.
CBRE said majority of the business process outsourcing companies (BPO) have taken space in reasonably-priced locations resulting to low office vacancies across Metro Manila.
Brisk expansions and cost sensitivity among global firms in the second quarter brought the overall office vacancy rate in Metro Manila to drop from 3.1 percent in the first quarter to 2.51 percent in the second quarter amid the supply pressure, said CBRE.
The office market in the Makati central business district (CBD) continued to draw in multi-national corporations amid the tightening supply.
Vacancy rates in the CBD had further declined to 4.27 percent in the second quarter from 5.07 percent in the first quarter.
CBRE noted that prime office spaces in the CBD continued to draw interest from multi-national firms resulting to a lower vacancry rate of 5.61 percent in the second quarter.
Strong demand has pushed the prime average lease rates up to P1,041.05, an increase of 1.25 percent quarter-on-quarter.
The average asking lease rate for the entire CBD increased to P901.46 in the second quarter from P809.27 in the previous quarter.