\n\u201cWe\u2019re in a period of transition\u201d
\nThe National Capital Region, or Metro Manila, remains the Philippines\u2019 economic and real estate hub
\nIn Part Two of this\u00a0four-part series, take a look at the rapid progress in the\u00a0real estate sector in the Philippine capital, Metro Manila
\nWhen John Forbes, senior advisor to the American Chamber of Commerce of the Philippines, caused a stir in January when he announced that Metro Manila could become uninhabitable in four years due to unresolved congestion and infrastructure problems. However, few residents of the capital could fail to recognise his inference.
\nSoaring residential prices aren\u2019t making the sprawling capital any more attractive. In Makati, the financial centre of the Philippines, existing mid-end residences cost up to PHP160,000 (USD3,424) per sqm, while high-end homes can sell up to PHP280,000 (USD6,000) per sqm, according to January 2016 estimates released by Cushman & Wakefield.
\nAt the highest end of the scale is the Daniel Libeskind-designed Century Spire in Century City, Makati, slated for completion in 2018. Prices at the mixed-use luxury residential tower can reach up to PHP171.1 million (USD3.7 million) per unit.
\nMore: Construction of the world\u2019s first Forbes-branded office tower begins in Manila
\nStill, residential prices in Metro Manila remain competitive compared to similar economies in Southeast Asia. They come in at around 20 percent lower than Bangkok and just about 15 percent higher than Jakarta.
\nSigrid Zialcita, managing director at Cushman & Wakefield, notes that rental yields are still on average higher than those in the Indonesian capital. \u201cOnce we factor in Philippines\u2019 all-round macroeconomic fundamentals, which are healthy, the story gets even more compelling,\u201d she says.
\nZialcita adds that Metro Manila will likely retain its position as the economic and real estate hub of the country. But like in any election year, it can be expected that property investors will adopt a \u201cwait-and-see\u201d stance, resulting in a slight uptick in investment activity in the second semester.
\nMore: 3 golden growth opportunities for the Philippine real estate sector in 2016
\n\u201cWe\u2019re in a period of transition,\u201d explains Julius Guevara, director of research and advisory at Colliers Philippines. \u201cSince the market\u2019s peak in 2012, sales of condominiums in Metro Manila have slowed down from about 50,000 units to between 30,000 and 32,000 units at the end of 2015.\u201d
\nIt\u2019s a significant dip, but Guevara points out that it\u2019s simply a result of aggressive investment activity in the last few years. \u201cIt\u2019s just we had a bull run for such a long time, and investors are still waiting for their units to be completed. They\u2019re also waiting for some rental revenue to come in before they make their next decision.\u201d
\nFor the time being, homebuyers are looking at more affordable areas of the capital to make their investments. Quezon City, which offers average prices at PHP110,000 (USD2,354) per sqm, is now the most popular area among online property seekers according to mass-market property portal Lamudi.com.ph.
\nCome back for Part Three.<\/p>\n
Investing in Metro Manila real estate
\nPros: Financial and cultural capital; modern amenities and attractions; emerging global city
\nCons: Congestion and infrastructure problems; high crime rate; affordable housing shortage
\nWhat to buy in Metro Manila for\u2026<\/p>\n
Mid-range: The Sapphire Bloc
\nDeveloper: Robinsons Land Corporation
\nUnits: 1,672
\nSize: 41 sqm (avg.)
\nPrice: PHP5.56 million (USD118,500) (avg.)
\nCompletion: North Tower (2015), West Tower
\nDistinguishing features: Located in the bustling Ortigas CBD, The Sapphire Bloc is a three-cornered, Art Deco-inspired property with a world-class retail area that caters to young, urban workers<\/p>\n
High-end: Three Central
\nDeveloper: Megaworld Corporation
\nUnits: 627
\nSize: From 41.10 sqm (studio) to 121.10 sqm (three-bedroom with balcony)
\nPrice: PHP6.7 million (USD143,000) to PHP23.3 million (USD500,000)
\nCompletion: 2017
\nDistinguishing features: Taking cue from the elegant interiors of first-class buildings in Hong Kong, Three Central will be a distinctive, light blue glass and concrete tower with future-proof safety features<\/p>\n