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PH property inventory rising at a breakneck pace

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Metro Manila this year is expected to boost its residential and office inventory at a faster pace than most other Asian cities as demand is seen to remain strong on the back of a growing economy, property consultant Jones Lang LaSalle (JLL) said.

For the last 10 years, Southeast Asia had been under the shadow of larger economies in the region, like China and India. But the region is now seeing a “renaissance,” attracting greater investor interest not just in real estate but across broader segments, said Chris Fossick, JLL managing director for Singapore and Southeast Asia.

In Southeast Asia, JLL’s fastest-growing business is in the Philippines because of its rosy domestic growth story, Fossick said Tuesday during a briefing.

JLL sees the inventory of high-end residential property in Metro Manila rising by 47.2 percent this year, faster than that of Bangkok with 15.1 percent, Jakarta with 13.6 percent, Shanghai with 11.2 percent and Kuala Lumpur with 9.1 percent.

“That’s a huge surge in supply of stock. That doesn’t mean it won’t be taken up. There are various reasons why it will be taken up—urbanization and the people’s desire to invest will have an impact,” Fossick said.

David Leechiu, JLL country manager, said demand for residential units remained strong as local savings rate continued to build up, apart from contributions of overseas Filipino workers (OFW) and the business process outsourcing (BPO) sector which, for many years, had been the traditional drivers of the economy.

There is likewise an increasing demand from foreign investors—those coming from Hong Kong, the United States and Singapore—looking to buy residential condominium units to rent out, Leechiu said.

“The foreign market is starting to come back, and they’re not here anticipating they can flip the property in a few years. They’re here to anticipate the rents,” Leechiu said.

In a local condominium development being serviced by JLL, for instance, Leechiu noted that there was a cluster of units bought up by 500 individual Singaporeans 18 months ago.

For office supply, Fossick said, significant supply has yet to come, but take-up is improving in most markets.

“It’s a mixed bag,” he said, noting that in Singapore and Ho Chi Minh City in Vietnam, rental rates are going down, while in the Philippines, rents are rising supported by the growth in BPOs, as well as multinational corporations expanding global back-office operations.

Grade A office stock in Metro Manila is projected to rise by 18.7 percent this year, next only to Ho Chi Minh’s 33.5 percent, JLL said. Other markets like Bangkok, Singapore and Sydney are not expected to see any office supply expansion this year, while Jakarta, Kuala Lumpur and Mumbai are projected to increase inventory by 9.3 percent, 5 percent and 10.6 percent, respectively.


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Tags: Asia , Growth , Philippines , property , Real Estate

  • anne_203

    Agree with the general sentiment here. We’re awash in cheap credit– and excess credit tends to fuel bubbles. The bad thing about this is that we’re living in a very different, and uncertain global economic climate. When the crisis happens, it will be harder for us to get out of the whole. I wish the central bank would actually sponsor studies to monitor real estate supply and vacancy rates and how that correlates with, i don’t know, maybe NPLs?

  • themask celestial

    “In a local condominium development being serviced by JLL, for instance, Leechiu noted that there was a cluster of units bought up by 500 individual Singaporeans 18 months ago.”
    These are the same singaporeans that make loud noise and complain of foreign workers in their city and make the real estate in sg unaffordable to the local. 

    • upupperclassman

      These 500 residential condominium units are situated near De La Salle University along Taft Avenue as reported in ABS-CBN news. These units are studio and small 1BR unit bought by Singaporeans and Hongkies to target students attending De La Salle University. This is no big deal foreign investment. These are most likely bought on installment plans expecting rentals to pay for the units. It will be nice to see 500 units of 2-3 BRs condominium units being taken up these foreign buyers. Then these will be real foreign investment. Do not take seriously the real estate hype being created by JLL in order to get more business. The breaking neck pace of building condominium is heading to a big bubble.

    • Avery Solco

      No, Chris Fossick is actually not Singaporean.

    • Avery Solco

      Same problem as what Singaporeans face with people like Chris Fossick.

  • manufacturer2

    It is only a bubble when people are borrowing more money than they can repay
    for their mortgages.
    Banks are diligent in their investigations, CB has instituted rules to avoid over heating,
    and, many forget that the economy is thriving not because we are on the shoulders of
    other markets but we are genuinely making huge economic strides in terms of policy.
    So, no, this isn’t a bubble. It is hopefully the beginning of our country prospering as it should
    have many years ago.

    • Avery Solco

      Oh yeah, what policy changes are there? The government is still very corrupt – both national and local agencies.

      • manufacturer2

        There are two kinds of corruption. Progressive and repressive.
        Progressive corruption spurred the growth of Singapore.
        Repressive corruption was Marcos, Arroyo, Ramos, etc.
        From the looks of it, this administration falls under progressive.

      • Avery Solco

        All corruption is not acceptable. Please explain what you mean by progressive corruption. Show us an example! And Singapore isn’t corrupt. Who told you it is? What exactly did Singapore do that was corrupt?

      • Avery Solco

        Also, you need to be investigated. You are probably a government employee is that corrupt or a spawn of one.

  • Guest

    We didn’t start the fire. It was always burning since the world’s been turning.

  • NoWorryBHappy

    BUBBLE, BUBBLE on the wall.
    How many SUCKERS all in all ?

  • Guest

    1997. Bangkok, Thailand. Thousands of empty condo units in the wake of years of building boom.
    1998. Jakarta, Indonesia. Thousands of empty villas, houses and condo units in the wake of AFC.
    1998. Manila, Philippines. Repossessed cars & condo units & defaulted housing loans & NPLs.
    1998. The Gaws of Uniwide, the Lopezes of Benpres & the Gos of Gotesco had their reckoning.

  • Avery Solco

    It has already happened before – 1997.

  • carlcid

    Beware of property bubbles. They can sneak up when you least expect them. The forbidding lessons of what happened in the U.S. and Europe should teach the Philippines to put some brakes on the almost unrestrained development of property. While the going is good, there are many justifications in order to think that the good days will be endless. Until the punch bowl is taken away, the inebriation stops and the painful hangover sets in.



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