How Chinese Investors are Making Philippine Real Estate More Expensive
There’s been some talk recently on how the Philippines’ stronger relations with China under the current administration have affected the country. While some of these situations are complicated (to say the least), others are relatively more straightforward.
One of those more straightforward influences is on Philippine real estate. Because as basic economics class would tell you, as demand increases and supply decreases, prices tend to rise.
That’s exactly what real estate analyst Leechiu Property Consultants (LPC) observed in the country’s property market in the last few years, with the boom in demand coming from—who else?—Chinese buyers and investors.
“Because of improving diplomatic ties with China, residential sales are no longer dominated by OFW (Overseas Filipino Workers) buyers but by buyers from the mainland,” wrote LPC. “Residential projects notably in the Bay Area, Makati, Manila, Ortigas, and Quezon City, and in other areas near POGO (Philippine Offshore Gaming Operators) locations and existing Filipino-Chinese are experiencing brisk take-ups of 12 [condominium] units a month.”
This heightened demand from Chinese buyers “will continue to push property prices up,” most especially in the Manila Bay Area. LPC revealed that at least 70 percent of the tenants in the Manila Bay Area’s residential projects are Mainland Chinese, compared to only 25 percent for Filipinos and five percent for other foreign nationalities.
The analyst provided three condo projects in the Bay Area as examples—Federal Land’s Bay Garden Club and Residences, SM Development Corp.’s Sea Residences, and Anchor Land’s Solemare Parksuites. These three developments saw their prices surge by 200 percent, 164 percent, and 74 percent, respectively, since their launch 10 years ago.
LPC also pointed out how many of the country's major real estate developers are taking notice. For Ayala Land, Chinese investors were responsible for 34 percent of its sales in 2017, more than tripling from the year prior. SM Development Corp. also revealed that 30 percent of its residential sales for the first quarter of 2018 were from Chinese investors, a surge from 10 percent in 2017 and less than five percent in 2016.
“There is a surge in Mainland Chinese buyers in the residential condominium sector, and we anticipate for this to continue for the long term especially with rekindled diplomatic ties between Philippines and China,” wrote LPC.
This story originally appeared on Esquiremag.ph.
* Minor edits have been made by the Townandcountry.ph editors.