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Monday, December 7, 2015

25 Things We Have Learned From Philippine Real Estate In 2015


Wazzup Pilipinas!

It goes without saying that 2015 is looking to be quite a good year for Philippine real estate. Although condo sales were not on par with what was recorded in 2012 (considered a banner year for Metro Manila’s condo market), other segments of the industry are posting stellar growth, particularly houses and office real estate. Lamudi Philippines (www.lamudi.com.ph) looked into its 2015 data and compiled a list of key observations that, hopefully, will guide the industry through years to come.

1. If you want a cheap condo, look at Las Piñas
At a Php 49,849 per square meter, buying a condo in Las Piñas is likely to be cheaper than anywhere else in the metro. At the opposite end of the scale, Makati is the most expensive, with condos in the area costing an average of Php139,012 per sqm. This means that a 60-sqm condo in Las Piñas will set a buyer back Php2.99 million, while the same in Makati will cost Php8.34 million.

2. 59% of houses for sale in Makati are worth more than Php100 million
It goes without saying that Makati is the Philippines’ priciest city to buy any type of real estate. In fact, Lamudi data shows that 59 percent of all listed properties in the city in the first quarter of 2015—most of them in swanky neighborhoods and exclusive communities—have asking prices of more than Php100 million.

3. Outside Metro Manila, Cebu City tops the pricy list
In the Queen City of the South, half of all listed houses for sale are priced Php8.5 million and up, making is the most expensive housing market outside Metro Manila. In fact, some homes here are fetching as high as Php150 million, rivaling opulent houses in Ayala Alabang and San Juan’s Greenhills Village.


4. How much salary do you need to afford a condo?
To afford a 60-sqm condo in Metro Manila, a buyer needs a monthly salary of Php128,323, according to Lamudi’s calculation. This assumes that the buyer spends not more than 30 percent of his monthly income on mortgage repayments (including principal and interest) and makes a 20 percent down payment on the property, following most banks’ 80/20 loan-to-value ratio. The average price of condos in Metro Manila is Php90,633 per sqm.

5. Houses rule!
House-hunters by a huge margin are still researching about houses or landed properties online. About a quarter of all searches for for-sale properties conducted in Lamudi from January to June of 2015 involved houses, compared to just 2.28 percent for condos.

6. An average family needs 32.25 times of its annual income to afford a home in Metro Manila
Based on Metro Manila’s median house price of Php8.8 million, an average Filipino family with an annual household income of Php273,000 (according to data from the 2012 Family Income and Expenditure Survey) will need 32.25 times of their annual income in order to afford a home in Metro Manila. City-wise, Caloocan offers the most affordable homes: median home price here (Php787,750) is 2.88 times of the annual household income.

7. Quezon City most popular among online property-hunters
Quezon City—Metro Manila’s largest city—had the greatest volume of online search traffic, according to Lamudi’s onsite data for January to June 2015. Search volume for the city grew, on average, 22 percent per month during the same period.

8. Metro Manila condos getting smaller
Looking at its listings data, Lamudi found that 42 and 41 percent of Metro Manila’s for-sale and for-rent condo inventories have floor sizes measuring 50 sqm or smaller—an apartment size many would consider as “shoebox.” This finding has been corroborated by a research conducted by Colliers International. According to its 2014 fourth quarter report, of the more than 30,000 preselling condo units expected to be delivered in the Makati CBD, Fort Bonifacio, Rockwell Center, Ortigas Center, and Eastwood City from 2015 to 2018, 75 percent are studio and one-bedroom units, ranging in size from 18 to 90 sqm.

9. Cities outside Metro Manila have highest surge in search traffic
Bacolod tops the list of Philippine cities that experienced a spike in search traffic in the first quarter of 2015, increasing 279 percent from the fourth quarter of 2014 (October–December) to the first quarter of 2015 (January–March). Bacolod is followed by Antipolo, Tagaytay, Baguio, Davao, and Bacoor, whose search traffic surged 118, 105, 95, 88, and 80 percent, respectively.

10. Quezon City has the most affordable office spaces for rent
Companies looking for an affordable office space to rent should head to Quezon City to find cheap commercial properties. Lamudi data show that office rents in Metro Manila’s largest city average Php503.79 per sqm per month.

11. And Taguig and Makati have the most expensive
Taguig and Makati offer the most expensive office rents anywhere in Metro Manila. According to Lamudi, office rents in these two cities average Php763 and Php635 per sqm per month, respectively. Makati’s priciest office spaces command monthly rents as high as Php1,400 per sqm, while Taguig’s go as high as Php1,000 per sqm per month.

12. Women drive house-hunting
In the Philippines, women are the primary users of real estate websites. According to Lamudi, 64 percent of online property seekers in the Philippines are women. This finding is consistent with research conducted in the West, which has shown that women are the primary users of online property portals. This makes the Philippines one of few Asian countries where women are on equal footing with men in terms of educational, economic, and political opportunities—and in making homebuying decisions.

13. Size matters in investment condos
If you buy and hold, go for bigger condos, those with three bedrooms or at least 150 sqm. Although these condos are definitely more expensive than smaller ones, they offer good returns in terms of capital appreciation. According Colliers International Philippines, luxury three-bedroom condos in the three markets it monitors (Makati CBD, Bonifacio Global City, and Rockwell Center) are expected to appreciate in value by between 5.1 and 6.3 percent by the end of 2015.

14. Forbes Park is the most expensive subdivision in the Philippines
Average monthly rents in the very exclusive Forbes Park—home to business tycoons, foreign dignitaries, and boxing icons—stand at Php402,459, making the enclave the most expensive area to rent a house anywhere in the Philippines.

15. Filipino-Americans prefer houses
Despite the condo boom happening in Metro Manila and other major cities across the Philippines, it seems that many Filipinos based in the United States still prefer to purchase houses, at least according to January–June 2015 search data from Lamudi. More than half (57.83 percent) of all searches in the Lamudi website were for houses, followed by condos (16.58 percent). The most searched cities? Quezon City, Makati, Manila, Tagaytay, and Baguio, in this particular order.

16. Cities affordable for first-time homebuyers
There are cities surrounding Metro Manila abound with affordable options for first-time homebuyers. These cities include San Jose Del Monte, Bulacan, where average home price stands at Php495,999; and followed by San Mateo, Rizal (Php549,259); Dasmariñas, Cavite (Php1.189 million); Imus, Cavite (Php1.858 million); Bacoor, Cavite (Php2.777 million); Antipolo, Rizal (Php3.668 million); Santa Rosa, Laguna (Php4.16 million).

17. Condos close to train stations are more expensive
An average condo located within 100 meters of an MRT station is at least Php16,645 more expensive per square meter than a similar, newly built condo situated more than 500 meters away, according to listings data from Lamudi.

18. Ayala Center, Century City, and Rockwell Center lead most expensive list
Ayala Center—the commercial core of the Makati CBD—commands the most expensive condo rent per sqm than any area Metro Manila. Living in the area, which is within striking distance of Greenbelt, Glorietta, and most of Makati’s luxury hotels, can set a renter back Php1,144 per sqm per month, meaning a 100-sqm condo here can command monthly rent of more than Php110,000. Following Ayala Center are Century City and Rockwell Center in Makati’s Poblacion area, where condos command monthly rents of Php986 and Php973 per sqm, respectively.

19. Pricier condos are not necessarily bigger
On a per-square-meter basis, more expensive condos do not necessarily mean bigger space. Areas where condos are on average bigger are actually cheaper on a per-sqm basis. These areas include Ayala Triangle/Apartment Ridge, where condos average 275 sqm and where monthly rents average Php568 per sqm. This area is followed by Salcedo Village, where the average size of condos is 126 sqm and average monthly rent stands at Php652 per sqm. In contrast, in the Mall of Asia Complex and Newport City, the average sizes of condos are 34 and 50 sqm, but monthly rents average Php850 and Php785 per sqm, respectively.

20. Caloocan will be the second most populous city by 2020
The City of Manila will be overtaken by nearby Caloocan as the Philippines’ second most populous city by 2020. This is according to an analysis by Lamudi using the annual average population growth rate issued by the Philippine Statistics Authority in 2010. Caloocan’s projected 2020 population will be 1.88 million, compared to Manila’s 1.72 million.

21. Eleven PH cities will have populations of more than 1 million by 2025
Using the annual population growth rates recorded in 2010, 11 cities in the Philippines are projected to have populations of more than 1 million. These are Quezon City (3.95 million), Caloocan (2.115 million), Davao City (2.056 million), Manila (1.76 million), Dasmariñas (1.27 million), Antipolo (1.25 million), Zamboanga City (1.25 million), Cebu City (1.14 million), Taguig (1.12 million), Bacoor (1.11 million), and Pasig (1.022 million).

22. Can BPO workers afford condos?
With an average monthly salary of Php22,500, entry-level customer care representatives cannot afford to rent a condo in either of these “affordable” areas: Eastwood City, Pioneer-EDSA, Poblacion (Makati), and San Antonio (Makati), where average rents range from Php19,838 to Php22,563 per month. Using the 30 percent rule (spending not more than 30 percent of one’s monthly income on housing), only those working as managers, with an average compensation of Php75,000 per month, may only afford to rent a condo in these select areas.

23. How long Filipinos should work to buy a home
A salaried Filipino with more than 20 years of work experience and earning Php1.43 million per year may need 128 years’ worth of his salary in order to afford a house in Makati where average home price stands at Php184 million. In contrast, this same person needs 4.16 months’ worth of his annual salary in order to afford a home in San Jose Del Monte, Bulacan, where the average home price is Php495,999.

24. Are Filipinos buying or renting?
Based on its third quarter 2015 search data, Lamudi found that there is an almost equal proportion of renters and buyers among 18- to 24-year-old online property-hunters (50.2 percent for rent versus 49.8 percent for sale). Quite interestingly, there is a tendency for property-hunters to check out for-sale properties online as they get older. Among 25- to 34-year-old users, 57.3 percent are checking out for-sale properties. In the 35–44, 45–54, and 55–64 age groups, it is even higher; 70.8, 72.6, and 71.1 percent of the website’s users, respectively, are checking out for-sale properties.

25. Most sought-after locations for land

Quezon City, Tagaytay, and Baguio are the top three most popular locations among property-hunters looking for land online. These cities are followed by Davao and Antipolo. “Clearly there are cities preferred by people researching about land for sale online, and we hope these findings will give real estate developers insight into how to properly plan their next projects,” said Lamudi. In addition, the fact that only five Metro Manila cities were in the top 10 indicate that Filipinos are not too keen into buying residential land within the National Capital Region, either due to lack of supply, unaffordability, or both.

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