Why Philippines’ property market is a gem hidden to most investors

At a time when global house prices are rebounding, the luxury market in Manila is going gangbusters. According to a Knight Frank index of prime residential prices in 100 cities across the world, the Philippine capital recorded the fastest growth last year. Prices grew a staggering 26.3 per cent, even outpacing Dubai. Manila also held the top spot in the first quarter of this year.

However, capital values are much lower than in the leading cities in Asia. According to Knight Frank, US$1 million bought 158 square metres (1,700 square feet) of prime residential property in Manila in 2022, compared with just 34 sq m in Singapore, 60 in Tokyo and 113 in Mumbai. The Philippine capital’s luxury market is booming but remains relatively affordable.

In the first quarter of this year, outsourcing and offshoring accounted for 53 per cent of leasing activity in metropolitan Manila’s office market. In Cebu, the share was as high as 80 per cent, according to JLL.

The good news is the government is investing in infrastructure. Airports are being built and modernised, which could help unlock the country’s tourism potential. The Philippines is rarely on investors’ radar, but there is more to its property market than meets the eye.

Nicholas Spiro is a partner at Lauressa Advisory