Riding the growth momentum | Inquirer Business
Colliers Review

Riding the growth momentum

The Philippine economy expanded by 8.3 percent in the first quarter of 2022, a turnaround from the 3.8 percent contraction in the same period last year.

It would be interesting to see the impact of this economic performance on the country’s residential sector for the remainder of 2022. In our view, there are several reasons to support an optimistic projection for the market.

For one, the Philippine economy is starting to open up, resulting in more businesses now operating at full capacity and employees working on site. Colliers Philippines is optimistic that the government-projected economic rebound, continued inflow of remittances from Filipinos working abroad, and the accelerated easing of mobility restrictions will further raise business and consumer confidence in the country.


Colliers thus sees tremendous opportunities for the property market for the remainder of the year, which should positively influence the residential segment.


Take advantage of rental corrections in major CBDs

Colliers Philippines recorded a decline in rents for studio and one-bedroom units in major central business districts (CBDs) including Makati, Fort Bonifacio and Ortigas Center compared to pre-pandemic rates. Colliers recommends that tenants take advantage of rental corrections in these prime locations.

Makati CBD, Fort Bonifacio and Ortigas Center remain attractive to firms who are planning to expand their offices in Metro Manila. In 2021, these CBDs accounted for 45 percent of total office space deals.

In our view, the return of more employees to their respective offices should help stoke residential leasing demand in these key locations. We encourage developers with a substantial number of ready-for-occupancy (RFO) units within these CBDs to offer attractive leasing terms to tenants to achieve optimal levels of occupancy.

Continue strategic landbanking activities

Colliers recommends that developers explore fringe areas viable for residential development.

In 2021, we have seen strong pre-sales in submarkets including the Caloocan-Malabon-Navotas-Valenzuela (Camanava) corridor, Alabang-Las Piñas, and Manila North. These areas accounted for 82 percent of aggregate take-up for affordable to mid-income projects in 2021. Developers should thus be constantly on the lookout for these thriving areas for residential developments.

Improve amenities, integrate value-added features

A survey by the IT and Business Process Association of the Philippines (IBPAP) revealed that about 90 percent of employees are more productive in a hybrid model. We encourage developers to improve their amenities, which will suit a work-from-home (WFH) setup.


To differentiate their projects in the market, developers should also consider integrating green technologies such as natural lighting, optimized air quality and rainwater catchment facilities as well as adopt sustainable features including green spaces and vertical gardens.

Improving business and consumer sentiment

In our view, the improvement in consumer and business confidence, and increase in overseas Filipino worker (OFW) remittances provide a sense of optimism in the residential market.

The Bangko Sentral ng Pilipinas’ (BSP) Q1 2022 Business Expectation Survey showed that the business outlook in Metro Manila improved to 35.7 percent from 20.1 percent in the same period a year ago.

OFW remittances, according to the BSP, are meanwhile projected to grow by 4 percent this year. According to the latest BSP Consumer Expectations Survey, the number of OFW households that utilize their remittances to purchase a house marginally increased to 5.2 percent in the fourth quarter of 2021 from 4.8 percent the previous year.

Recovery in rents and prices

We forecast rents and prices to increase by 1.5 percent and 2.7 percent respectively by end 2022. The return of more employees to their traditional offices and traffic to its pre-COVID-19 level should signal the recovery in the residential leasing market.

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Based on our Q4 2021 Office Survey, 42 percent of respondents said their companies are requiring 75 percent to 100 percent of their workforce to start reporting on-site. This should encourage employees to rent a condominium unit or co-living facility near their offices.

TAGS: Business, colliers review, column, economy, Growth, property

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