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Business

Strong fundamentals sustain property prices

Iris Gonzales - The Philippine Star

MANILA, Philippines — The government’s strong fiscal fundamentals have sustained property prices despite almost two years of the pandemic.

This is according to Leechiu Property Consultants’ yearend report covering the office, capital markets and the residential sector.

LPC said office demand for 2021 grew while capital values and interest appreciated, even surpassing pre-pandemic levels this year.

Office demand, for instance, rose by 39 percent to 540,000 square meters versus the 389,000 sqm in 2020.

Among the different sectors, the IT-BPM sector remains the largest demand driver, accounting for 48 percent of 2021 transactions, LPC said.

“As the country recovers from a rise in COVID cases and strict lockdowns in the third quarter of 2021, demand in the fourth quarter increased by 74 percent from the third quarter demand. Although a new COVID-19 variant has recently been reported, office demand is set to steadily improve in 2022 as indicated by signs of recovery from 2021,” it said.

In-demand areas include Ortigas, Quezon City, Makati, BGC, Bay Area and Alabang in Metro Manila, and in the provinces, Iloilo, Clark, Pampanga, Davao, Cebu and Laguna.

Commercial land values, meanwhile, saw steady increases despite the crisis.

LPC said BGC accommodation values (AV) have reached an all-time high of P113,000.

BGC has also seen the most growth over the past years with a CAGR (compounded annual growth rate) of 17 percent, data from LPC further showed.

In the residential market, there are 23.2 million sqm of current supply and 7.4 million sqm in the pipeline.

There is a low inventory left, with 501,000 sqm unsold from the current supply and 1.63 million unsold from the pipeline supply.

Demand for condominiums saw an increase of 12 percent in the fourth quarter from last quarter, with 8,000 units sold for the fourth quarter of 2021.

Capital values in key business districts remain stable but are experiencing downward pressure due to a decline in yields, LPC said.

PROPERTY

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