There are a number of reports about what’s in store for the Metro Manila condo market in 2019. These range from the classic consultancy speak of “cautiously optimistic” to gloomier predictions. Decoding fact from fiction can be a painstaking task.
Ultimately, it’s still too early to make any predictions about the Metro Manila condo market in 2019. However, we can take a look at a few things real estate investors should be aware of as we carry on into the new year.
Metro Manila condo market: 3 things to consider
High interest rates sting
In order to combat dangerous inflation, the Bangko Sentral ng Pilipinas (BSP) raised interest rates a staggering five times last year. This was done to control money flows in the economy, but most banks ended up passing on the buck to consumers looking for a loan.
According to Rappler, economists predict that the BSP will keep interest rates at the current levels for the foreseeable future in order to bring down the country’s inflation rate to below four percent. This could lead to more people holding off on making condo purchasing decisions until after interest rates come down.
Bay Area keeps growing
The Bay Area overtook Ortigas Center to become Metro Manila’s third largest submarket in terms of condo stock late last year. And Colliers International believes the area is only going to keep growing this year and beyond.
“(We) see the completion of more than 6,000 new condo units in the Bay Area out of the projected 15,000 new units. We also expect the Bay Area to overtake other submarkets such as Makati central business district by 2021,” a Colliers International report explained.
The China factor
An influx of Chinese buyers and renters boosted the Metro Manila condo market last year and they will continue to be a major player in 2019, according to Pinnacle Real Estate Consulting Services. The firm told the Business Inquirer that a growing number of offshore gaming workers from the mainland helped the rental market in places like Makati and the Bay Area.
Chinese real estate investors have taken notice of this and are now more active in Metro Manila. And importantly for developers, foreign buyers, along with OFWs, have taken advantage of the inflation spike in the Philippines that has made the US dollar and other currencies stronger against the peso. Overseas property investors will continue to eye Metro Manila condos in 2019 as long as the peso remains weak.