Albeit lagging in the Prime International Residential Index (PIRI 100) of London-based real estate firm Knight Frank in 2021, the Philippines’ luxury real estate segment has seen resilient and consistent performance in the previous years.

Several property firms have shared the observation that the said segment remained steady last year and is expected to stay so this year.

As reported by The Philippine STAR earlier this year, professional real estate brokerage services company Leechiu Property Consultants (LPC) noted that luxury village land values and luxury condominium prices continue to increase in spite of the 18 months of lockdowns.

“Capital values for luxury projects have continued to grow despite the economic downturn which shows the strong capital preservation of these assets,” LPC was quoted as saying in its first quarter briefing.

The firm further stressed that among the luxury villages, land values in Ayala Alabang in Muntinlupa have reached an all-time high of P200,000 per square meter (sq. m.) as of the said quarter, up from P150,000 per sqm in the same period last year. The village also tallied the highest prime lot change of 58%, followed by San Lorenzo (19%) and Greenhills (14%). Dasmarinas Village posted the highest value, with a range of P400,000 to P550,000 per sq.m.

Meanwhile, among the luxury condominiums on LPC’s list, Aurelia Residences of Robinsons Land Corp. in Bonifacio Global City, Taguig showed the highest prime unit change at 17%, with value going as high as P657,000 per sq. m. Horizon Homes posted the highest values, ranging from P599,000 to P786,000 per sq.m.

In addition, Michael McCullough, managing director of real estate consultancy KMC Savills, said in PropertyGuru Property Report that within the general residential market — which he observed remained weak but improved relative to 2020’s performance — the luxury segment was the most resilient while the mid-segment showed recovery signs.

Much earlier, in a BusinessWorld report published before the previous year closed, Mr. McCullough said demand for luxury condominium units will remain stable this year as high net-worth individuals renovate units in the major central business districts (CBDs) on expectations of higher returns.

Sharing a similar view, Joey Roi H. Bondoc, associate director of real estate services company Colliers Philippines, said in the same report that mid-income and upscale residential units will continue to dictate launches and take-up of condominium units in Metro Manila.

These outlooks seem to have started materializing, as hinted in online real estate marketplace Lamudi’s most recent quarterly outlook.

The outlook highlighted that during the first quarter (Q1) of the year, Taguig, compared to Makati and Pasig CBDs, exhibited the largest increase in leads for residential rentals which belong to the upscale and luxury (with prices at P200,000 and above) segments. Lamudi sees this as “a trend that may be influenced by returning expats and C-level executives amid an improving business environment.”

This is a boost from a finding in the company’s earlier “Property Seeker Trends” from the second half of 2021, which stated that luxury listings attracted 2% more leads from the third quarter to the fourth quarter of the said year.

Moreover, in Lamudi’s outlook from Q1 of last year, within leads for luxury properties for sale, those listings priced at more than P20 million got the largest chunk. Leads for luxury properties for rent were much diversified, with those ranging from P60,000 to P100,000 getting the biggest share.

This positive picture is being painted in spite of a declined performance — and the Manila market’s steepest decline yet — on a global scale.

In Knight Frank’s PIRI 100, an annual assessment of prime residential prices across 100 locations around the world, Manila currently ranks 97th out of 100 key cities; and it has the second-lowest contraction in luxury residential prices in Asia-Pacific in 2021. Having recorded a 1.5% decline in the prices of luxury residential properties, the Philippine capital plunged 96 places from being the hottest prime residential market in 2020.

Prior to its current ranking, Manila was one of the top five Asia-Pacific markets from 2018 to 2020, when it recorded a 19.4% annual incline in prices.

The whole PIRI 100 increased in value by 8.4% in 2021, up from just under 2% in 2020 and its highest annual increase since the index was launched in 2008.

“Of the 100 luxury residential markets tracked, only seven saw prices decline in 2021 while a staggering 35% of locations saw them increase by 10% or more, underlining the strength of the sellers’ market during the pandemic,” Kate Everett-Allen, head of International Residential Research at Knight Frank, wrote in the firm’s The Wealth Report.

With a resilient performance amid the pandemic to ground itself with, the Philippine luxury property segment has an opportunity to attract demand beyond leads and complete this year with better performance and, perhaps, a better ranking in the global market. — Adrian Paul B. Conoza

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