Positive signs in the trajectory of the luxury segment

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Although lagging London-based real estate firm Knight Frank’s Prime International Residential Index (PIRI 100) in 2021, the Philippines’ luxury real estate segment has seen resilient and consistent performance in previous years.

Several real estate companies shared the observation that said segment remained stable last year and is expected to remain so this year.

As reported by THE PHILIPPINE STAR earlier this year, professional real estate brokerage services firm Leechiu Property Consultants (LPC) noted that the value of luxury village land and luxury condominium prices continue to rise despite the 18 months of closure.

“The capital value of luxury projects has continued to grow despite the economic downturn which shows the strong capital preservation of these assets,” LPC said in its first quarter briefing.

The company further pointed out that among luxury villages, land values ​​at Ayala Alabang in Muntinlupa reached an all-time high of P200,000 per square meter (m²) from the said quarter, up from P150,000 per m². at the same time last year. The village also had the highest batch change of 58%, followed by San Lorenzo (19%) and Greenhills (14%). Dasmarinas Village posted the highest value, with a range of P400,000 to P550,000 per m².

Meanwhile, among the luxury condominiums on LPC’s list, Robinsons Land Corp.’s Aurelia Residences. in Bonifacio Global City, Taguig showed the highest unit change at 17%, with a value of up to P657,000 per m². Horizon Homes posted the highest values, ranging from P599,000 to P786,000 per m².

Additionally, Michael McCullough, managing director of real estate consultancy KMC Savills, said in PropertyGuru Property Report that within the general residential market – which he said remained weak but improved from 2020 performance – the luxury segment was the most resilient while the midsize segment showed signs of recovery.

Much earlier, in Business world report released before the close of the previous year, McCullough said demand for luxury condominium units will remain steady this year as high-net-worth individuals renovate units in key central business districts (CBDs) in s expecting higher returns.

Sharing a similar view, Joey Roi H. Bondoc, associate director of real estate services firm Colliers Philippines, said in the same report that middle-income and high-end residential units will continue to dictate launches and take-up. responsible for condominium units in Metro Manila.

These prospects appear to have started to materialize, as the latest quarterly outlook for the Lamudi online real estate market suggests.

The outlook pointed out that during the first quarter (Q1) of the year, Taguig, compared to the CBDs of Makati and Pasig, posted the largest increase in leads for high-end and luxury-owned residential rentals. (with prizes of P200,000 and above) segments. Lamudi sees this as “a trend that can be influenced by the return of expats and C-level executives in an improving business environment.”

This is a boost from a finding in the company’s earlier “Property Seeker Trends” for the second half of 2021, which indicated that luxury listings were attracting 2% more leads from third to fourth. quarter of that year.

Moreover, in Lamudi’s outlook for the first quarter of last year, among prospects for luxury properties for sale, listings priced at more than 20 million pesos got the largest share. Prospects for luxury rental properties were very diverse, with those ranging from P60,000 to P100,000 getting the largest share.

This positive picture is being painted despite a declining performance – and the biggest decline in the Manila market to date – globally.

In Knight Frank’s PIRI 100, an annual assessment of prime residential prices in 100 locations around the world, Manila currently ranks 97e out of 100 key cities; and it has the second-smallest luxury home price contraction in Asia-Pacific in 2021. After recording a 1.5% decline in luxury residential property prices, the Philippine capital plunged 96 places from the hottest residential market in 2020.

Prior to its current ranking, Manila was one of the top five markets in Asia-Pacific from 2018 to 2020, when it recorded an annual price increase of 19.4%.

The overall PIRI 100 rose 8.4% in 2021, up from just under 2% in 2020 and its biggest annual increase since the index launched in 2008.

“Of the 100 luxury residential markets tracked, only seven saw prices decline in 2021, while 35% of locations saw them increase by 10% or more, underscoring the strength of the sellers’ market during the pandemic,” said Kate Everett-Allen, head of international residential research at Knight Frank, wrote in the The Wealth Report.

With resilient performance amid the pandemic to anchor itself, the luxury real estate segment in the Philippines has an opportunity to attract demand beyond prospects and end this year with better performance and, perhaps to be, a better ranking in the world market. — Adrian Paul B. Conoza

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