Philippines World’s Best Performing Prime Housing Market

Major real estate companies are accelerating the development of luxury residential projects in the Philippines and introducing more million dollar homes to tap resilient demand from both affluent local and foreign buyers in the world’s best-performing prime housing market.

Prime residential prices in the Makati financial district and nearby towns climbed 26% in the 12 months through March 2024, the biggest jump among 44 cities tracked by Knight Frank in the Prime Global Cities report published in May. The growth can be attributed to the Philippines’ robust economic performance (among Southeast Asia’s fastest growing economies), as well as significant infrastructure investments in and around Metro Manila.

Manila’s strong growth can be attributed to two particular factors: strong economic performance, which has boosted consumer confidence and spending power, and significant infrastructure investment in and around the city, which has also boosted demand.

This resurgence comes as the Philippine government opens the economy to more foreign investment, supercharging its retail and industrial segments.

Propped up by a sanguine job market and record remittances from the 12-million-strong Filipinos overseas, locals are simply “going out more and have more money to enjoy non-essential activities,” claims the country’s finance department.

Residential real estate prices nationwide rose 12.9% year-on-year in the third quarter of 2023, central bank figures show. At the same time, luxury home prices in Manila saw the highest growth of any city in the world.

“We expect the momentum seen in 2023 to continue well into 2024 and beyond,” says Lovelle Taleon, director of consultancy at real estate agency Santos Knight Frank. “It's undoubtedly going to be a transformative period for Philippine real estate.”

The Philippines’ GDP grew 5.6% in 2023, missing government targets but still expanding faster than that of China, Vietnam, and Malaysia. Higher household consumption and investments in public infrastructure funnelled an uplift to the lower middle-income economy.

International tourist arrivals topped 5.45 million last year while expatriates returned to the leasing market, pushing up rents by 3.5% in sought-after areas like Makati, Fort Bonifacio, and Rockwell, according to research from real estate firm Colliers.

This price escalation was and still is a direct result of the restricted supply of high-end residential developments available in the market,” the firm comments.