The price of land at Makati’s central business district (CBD) rose by more than a quarter over the past year to match in nominal terms the record-highs reached before the 1997 crash, the Bangko Sentral ng Pilipinas (BSP) said.
In a report, the BSP said land values in Makati City, the country’s economic center, rose by 25.4 percent year-on-year to reach P443,750 per square meter at the end of March 2015. Quarter-on-quarter, implied prices were up 0.9 percent.
Similarly, implied values in the Ortigas Center rose by 1.9 percent quarter-on-quarter and 10.3 percent year-on-year to P161,500 per sqm of land, the BSP said, citing data from consulting firm Colliers International.
Nominal figures are the actual prices in 1997. Real terms, on the other hand, are these prices adjusted for inflation.
“Land values in the Makati CBD were slightly above their 1997 levels in nominal terms,” the BSP said, but added that prices were only about 45.9 percent of their 1997 levels when adjusted for inflation. Meanwhile, land values in the Ortigas Center were about 82.8 percent of their 1997 level in nominal terms and 36.4 percent in real terms.
Despite rising land and rent costs, the BSP said demand for office and home space remained strong. The average office vacancy rate in the Makati CBD was broadly stable at 2.2 percent in the first quarter relative to the quarter-ago level of 4.2 percent.