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Condos attracting a lot of buyers in the Philippines, according to consultants

Middle income residential developments have become popular the past few years because of their affordable prices while luxury condominiums have remained robust despite their steep prices, according to real estate advisory firm CB Richard Ellis Philippines.

‘You can’t buy large pieces of land in Metro Manila anymore so the next closest thing would be a luxury residential condominium,’ said Jose Luis Matti, executive director of CBRE Philippines Asset Services.
Luxury condominiums are usually priced from P175,000 to P225,000 per square meter.

Units that are bigger than 200 to around 300 square meters are also considered to be in the luxury sector.
‘Despite their prices, there are always buyers of luxury condominiums because there are those who can’t buy a property in Forbes Park and Bel Air. For people who have money, the next best thing is to buy a luxury condo,’ Matti explained.

A 2011 third quarter residential market report from CBRE shows that rental rates in residential houses in Forbes Park are at P350,000 to P500,000 per month while rates in Dasmarinas Village range from P300,000 to P400,000.

According to Victor Asuncion, CBRE global research and consultancy group executive director, the supply of luxury residential condominiums will remain constant until the turnover of 220 units of Raffles Residences by Ayala Land and KSA in 2012.

An additional 90 units are also expected with the completion of JTKC Land’s Discovery Primea in 2013. Both projects are located in Makati central business district.

In Fort Bonifacio, Shangri-la at The Fort will bring in additional 96 residential units by 2014.
Matti has found that the growth of the expat population has fuelled the demand for luxury residential condominiums in the country.

Matti said leasing by expats is also driving the growth of the luxury residential condominium market. ‘If it’s bought for investment purposes, the chance of you being able to lease it out at a very good rate is high,’ he explained.

‘A 300 square meter condo could go for around P300,000 a month in rent so if you look at that in terms of investment, if you bought one of those to lease out, your return on investment would be pretty good. I think that’s also one of the drivers,’ he added.

Besides the expat population, Matti said people with a lot of family money, prominent families in Manila, and families in large corporations as the primary buyers of luxury projects in the country.

‘There have been a few years in the past when the market for luxury residential hasn’t been as good but I think we’ve gone past the hump and it has always been one of the better performing segments of the industry that’s why there are always high end projects,’ Matti said.

He added that he expects the take up for luxury condominiums this year to remain high.