Outlook on Philippine Real Estate Recovery & Opportunities for 2024

The Philippine real estate industry is getting traction and pushing to make a much-anticipated comeback this 2024. There is talk about the industry getting up to pre-pandemic levels which may be due to several synergistic factors present this year. Altogether these have collectively created a favorable environment that lends itself well to an energized market.

Local and foreign buyers return

One of the key factors driving the growth of the Philippine real estate industry is the return of established buyers. Once skeptic foreign investors are again spending with renewed confidence alongside local buyers, emboldened by the country's display of economic resilience during the COVID-19 pandemic.

Residential sales reign

What is being bought? The purchase of residential builds remains to be the bulk of the transactions. Even young buyers are eager to win at the real estate game snatching up house and lot properties to secure their future early on.

Residential buildings reported the highest number of constructions in 2022 (121,106 or 71.5 percent of the total number of constructions during the year) which is 4.6 percent more than the previous year’s 115,772 constructions. Most of which were single-type houses. Therefore we can expect enough supply for people looking to buy single-family homes and other residential property types.

Where are buyers looking? Most are scouring for their great next buy in CALABARZON. However, Cebu, Lapu-Lapu, Baguio, and Angeles are in the mix.

Positive economic indicators

Other encouraging indicators are the country's steady GDP growth over the years as well as the government's prediction of a 6-7% increase this year. Together they lend an air of stability to the industry and a favorable climate to invest in real estate.

Government backs recovery in policies and initiatives

Moreover, the government approved Senate Bill No. 2219 (SBN 2219) in May of last year, which extends the period of availing of Estate Tax Amnesty. This passing was a key economic decision underlining the government's support of the Philippine real estate industry and its recovery efforts at all levels. This is expected to revitalize the market by encouraging property transfers and transactions.

Additional policies and initiatives have been put in place to attract foreign investments and encourage local buyers to invest in real estate. These measures include tax incentives, streamlined processes for property acquisition, and infrastructure development projects that enhance connectivity and accessibility. These are exciting news for discerning property buyers looking to see investment returns.

Build, build, build agenda

Lastly, the current administration has its Build, Build Build program which is part of the President's 8-Point Socioeconomic Agenda. A component of this is infrastructure where various major development projects impact not only the future of the real estate industry but also increase transportation efficiency and ensure the reliability of supply chains for goods and services. The program includes infrastructure projects like new airports, inter-island mega-bridge linkage, high-standard highways, flood management, and mass transportation systems that are rising in various regions of the country envigorating local economies and strengthening the purchasing power of the Filipino middle class.

Cities searched most for houses and lots:

1. Quezon City

2. Paranaque

3. Makati

4. Cebu

5. Muntinlupa

6. Las Pinas

7. Pasig

8. Angeles

9. Baguio

10. Antipolo

Cities searched most for condominiums:

1. Makati

2. Quezon City

3. Manila

4. Taguig

5. Cebu

6. Mandaluyong

7. Pasig

8. Pasay

9. Muntinlupa

10. Lapu-Lapu

Green home features wish list:

1. Energy-efficient appliances

2. LED lights

3. Use of recycled or reclaimed materials

4. Low VOC (volatile organic compounds) paints and finishes

5. Use of sustainably sourced wood

6. Installed low-flow faucets/showerheads

7. Dual-flush toilets

8. Solar power

9. On-site recycling programs

10. Composting facility

11. Air filtration system

12. Proper ventilation

13. Green space

14. Outdoor amenities

Why 2024 can be the Philippine real estate industry's true comeback year:

• Return of both local and foreign buyers

• Inventory to support the demand for residential properties

• Positive economic indicators

• Favorable government policies and initiatives

• Alignment with the Build, Build, Build Agenda of the Administration

• Exciting opportunities in commercial real estate

Cities searched most for commercial properties:

1. Quezon City

2. Makati

3. Manila

4. Pasig

5. Taguig

6. Mandaluyong

7. Paranaque

8. Cebu

9. Muntinlupa

10. Pasay

Recommended Reads

• Cities Searched Most Online for Properties Available to Rent or Buy

• The Elusive Philippine Affordable Housing Solution

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Emerging real estate trends

Sustainable & Green Features

The demand for homes with eco-friendly and sustainable features is undoubtedly on the rise, as more and more homebuyers recognize the value and benefits of living in an environmentally-conscious dwelling. These "green" homes often come at a premium price point, as they remain a relatively scarce commodity in the current real estate market. When buying or selling a home that promotes a sustainable lifestyle, it's important to know about the different green features that can improve a property's energy efficiency, lessen its environmental footprint, and save money for the homeowner over time. We've compiled a list of 14 features that buyers seek in a green building.

Prices on the Rise

Aside from the dip during the height of the pandemic, prices have gone nowhere but up. The steady rise is expected to continue as buyers show a willingness to pay more than asking to acquire their property of choice. Overall, the Philippine real estate industry shows promise. However, investors and developers must be mindful of the continuing high inflation rate as it could impact interest and mortgage rates.

Scarce Affordable Housing

Overseas Filipino workers are concerned over the lack of headway in both the government and private sectors to supply the demand and need for budget-friendly housing even though affordable builds have been touted as a priority initiative. According to the Subdivision and Housing Developers Association Inc. (SHDA), there are currently 3.9 million units delayed in completion. This gives people and families little to no choice but to live in conditions lacking access to necessities for safety and health.

Flexible Layout to Create a Home Office Space

Many property buyers are looking for homes that have a room or a space to dedicate as an office. Due to the continuing work-from-home and hybrid work arrangements, this will continue to be a deal-breaker for some home buyers.

Opportunities in Commercial Real Estate

This is proving to be an exciting market for developers with the business anticipated to post US$0.77tn this year. As buyers are scouring current available inventory, there is not only a lack of supply but many properties are falling short of expectations. What are buyers looking for?

Mixed-Used Spaces

Mixed-used spaces have gained popularity in recent years, and this trend is expected to continue in 2024. These spaces combine residential, commercial, and recreational areas, creating a vibrant and convenient environment for residents.

Remote Work and Co-Work Spaces

This trend is changing the workplace all over the country. Developers are building with a remote worker's needs in mind. Existing structures are being reimagined to entice this new breed of professionals.

Integrated Wellness Areas

There is a growing demand for properties with integrated indoor and outdoor wellness features and real estate developers are responding by providing inventory to satisfy this bourgeoning want. We are seeing the integration of amenities like basketball courts, fitness centers, lounges, spas or saunas, outdoor/indoor pools, barbecue areas, jogging/nature paths, and playgrounds to attract health-conscious buyers.