Residential and Retail Push Philippine Real Estate Market to Thrive More

According to Santos Knight Frank, a real estate consultancy company, the promising growth of the luxury homes and retail sector in the Philippines keeps the market stable as evolving infrastructure projects and consumer trends continue to provide opportunities. Steady growth in both high-end and mid-market segments is evident while Metro Manila remains in the number one spot when it comes to high-value housing units. Let’s learn more about the growing opportunities in the Philippine real estate market in this article.

Philippines’ Resiliency in Real Estate

As reported in SKF’s Prime Global Cities Index, residential prices recorded the highest internationally with an annual increase of 29.9%. There’s a high demand for premier properties but a small supply in important locations like Makati City wherein there was an increase from 13% to 17% annual growth rate for premier villages in 2024. The newly built LRT-1 Cavite Extension provides better accessibility therefore increasing the value of real estate within the area. At the same time, the proximity to transit hubs opens more investment opportunities for home buyers and real estate investors.

On the other hand, there’s also an expected growth in mid-market segments as new developments are in place for the next two years. The goal is to address the limited supply outside the metro while meeting the growing demands in the real estate market. There was a 4.2% year-on-year price increase in residential units outside Manila. This emphasizes the opportunities for development on the far side of urban areas. However, vacancy rates still experienced a slight increase due to new supply competition and drawn-out rental activity.

Shift from Online to Brick-and-Mortar Shops

There is an ongoing resurgence when it comes to consumer trends as major e-commerce brands are now having their physical stores as well. The mall occupancy rate in Metro Manila and Makati is at 90%, while Quezon City and Taguig average 92%. This integration of brick-and-mortar shops or an online-to-offline model is a way for e-commerce brands to showcase their products while offering personalized experiences to customers.

However, vacancies are still high for retail spaces with less foot traffic and older malls. It's a good thing new entrants are rapidly filling up new malls as F&B owners expand their businesses. In addition, local brands and international companies are in high demand for bigger retail spaces as hybrid retail models are being integrated into their marketing strategies.

Final Thoughts

All these improvements in the residential and retail sectors have helped improve business strategies, hence boosting the growth of real estate in the Philippines. This sustained growth makes developers pursue both mid-market and high-value properties in key areas. If you’re planning to invest in a new housing unit or want to expand your business with another retail space, you can contact us for some excellent suggestions. We have real estate experts to guide you every step of the way until you get the exact unit you’re looking for!