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The Philippine economy is bound to be on the path to strong, resilient recovery this year despite the ongoing pandemic.
Residential Supply
All of the new residential supply in 2021 came from the Bay Area and Fort Bonifacio. 86% of the supply is from the Bay Area. This includes Bayshore Residential Resort 2 Clusters A & B, Kingsford Hotel Manila in Bay Area, The Albany (Kingsley Building) and Uptown parksuites Tower 2 in Fort Bonifacio. A total of 8,731 residential units have been completed in 2021, up by 159% from the 3,370 units completed in 2020. Colliers expects the delivery of 6,500 units per year from 2022 to 2026.
Despite Covid-19, Colliers observed a sustained demand for horizontal developments in Pampanga, Bulacan, Tarlac, Cavite, Laguna and Batangas.
Residential Demand Drivers
Cash remittances from Overseas Filipino Workers (OFW) continue to be one of the primary residential demand drivers. Remittances reached USD28.8 billion from January to November 2021 up by 5.2% from the same period last year. Interest rates also play a vital role in keeping mortgage rates attractive to investors. BSP’s benchmark interest rate remains at a record-low of 2%.
Rents and Prices
Colliers expects rents and prices to increase by 1.% and 1.5%, respectively as demand recovers. Residential Real Estate Price Index (RREPI) by BSP also shows that nationwide house prices increased by 6.3% in Q3 2021 from the same period last year due to stronger consumer demand for residential property.
Hotels
A total of 191 rooms have been delivered in the second half of 2021. Colliers is expecting the completion of 1,600 rooms in 2022. The Bay Area is expected to account for 57% of new supply.
Partly due to more Filipinos who are arriving in the country and using hotels as quarantine facilities, the occupancy rate in the second half of 2021 has improved. Daily room rates on the other hand, are expected to recover slowly, backed also by the demand from Filipinos who are returning to the country.
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