Philippines Real Estate Market Outlook 2021: A Complete Overview

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Philippines has become one of the hotspots for foreign property buyers in Southeast Asia. With favorable demographics and an increasing middle class, Metro Manila has undoubtedly seen the biggest interest.

Foreign corporations move to the region, setting up offices and operations in places like Cebu and Davao, where labor costs are low.

With that said, the COVID-19 had a profound impact on real estate markets all over the world and the Philippines was not an exception. Yet, this might result in a rebound in 2021.

In this article, I share our predictions for the Philippines’ property market in 2021.

Topics covered in this article:

  • The Property Market in Previous Years
  • How did the market perform in 2020?
  • How will Philippines’ real estate market perform in 2021?
  • What is driving the demand for real estate in the Philippines?

The Property Market in Previous Years

Philippines real estate market has grown at an exceptional rate in the past years, following the path of the country’s economic growth, starting from 2010.

Looking at the office market, over 70,000 new office spaces were added to the Manila business districts in 2017, breaking a new record. Still, the vacancy rates remained low and at around 5%.

Despite seeing reduced economic growth in the first nine months of 2018, the office market performed well with a healthy supply.

At the same time, analysts believed that rents would rise steadily and by 8% annually until 2021.

The Market Remained Stable in 2019

Analysts forecasted a slow-down throughout 2019, but the market remained resilient. Many are certain that the real estate market will remain stable, even in the case of a global economic downturn.

Chinese companies, especially tech and gambling companies have opened plenty of new offices in Manila in the past years.

These offshore gaming firms had a big impact on the exceptionally low vacancy rates in Manila’s central business district, despite the increase in supply.

Not to forget, there’s been a continuous rise of Chinese investors, driving the demand for property and pushing prices upwards.

The companies don’t only buy or rent office space in business areas like Makati, but also buy residential properties for their employees.

Business Process Outsourcing (BPO) is also an important pillar of the economy and one of the country’s fastest-growing sectors. Numerous foreign companies target the Philippines’ young and English-speaking talent pool.

The industrial property market is expected to see strong growth at the same time as the need for flexible workspaces, such as co-working spaces, will increase significantly in the coming decade.

The Residential Property Market

The residential property market was stable and prices continued to rise before 2019. According to Colliers, the average price for 3-bedroom luxury condominiums rose by more than 15% in 2018, to USD 4,371 per square meter.

The market outperformed all previous years since 2013. Having said that, we’ve seen issues with an oversupply of units and high vacancy rates in certain areas.

According to JLL, the increased demand for residential units mainly come from young local professionals, upgrading families, and High-Net-Worth-Individuals (HNWIs) from overseas.

We also see increasingly high remittances from Overseas Filipino Workers (OFWs).

Looking at condominiums, around 20,000 units were completed in the second quarter of 2019 with most of the supply allocated to Taguig and Makati. Pasay City will also see much growth until 2021 thanks to the increased investments in Bay City.

From 2019 to 2021, Colliers International Philippines predicts that 8,300 new condominium units will be built yearly, amounting to 142,000 units by 2021. That’s a 33% increase compared to 2017.

In addition to Manila, we also see increased activities in emerging cities outside of Metro Manila, including Cebu, Iloilo, and Davao. Firms now outsource to other parts of the Philippines.

This will most likely have a positive impact on the local residential markets in the long-term.

Manila Property Prices

Property prices have increased much in Manila over the years. Below you can see the year-on-year price increase for 3-Bedroom Luxury condominiums in Makati from 2013 to 2018:

  • 2018 – 15.55%
  • 2017 – 10.4%
  • 2016 – 9.95%
  • 2015 – 13.43%
  • 2014 – 7.11%
  • 2013 – 14.37%

Overall, prices increased by 5.7% on average nationally in 2017, where we saw the highest increase for duplex houses, followed by condominium units. Prices for single-detached/attached houses fell slightly.

There was also a considerable difference in price increases in the NCR (National Capital Region) and areas outside of the NCR. In NCR, residential property prices increased by 8.8%, but the price increase was merely 3% in the rest of the country.

In 2018, luxury home prices increased by 11.1% year-over-year on average, the largest growth rate among 100 key global cities.

How did the market perform in 2020?

The property market took a big hit due to the COVID-19 crisis which resulted in diminished tourist arrivals, travel restrictions, reduced OFW remittance inflows, unemployment, and business consumer confidence.

Vietnam was the only country in the region that saw positive economic growth, while other countries saw major contractions.

Below are some interesting numbers shared by Santos Knight Frank that has actively researched the market throughout the crisis:

  • GDP: Reduction of -16.2% in Q2 2020
  • OFW Remittances: Down by -2.4% in August 2020 compared to 2019
  • Inflation rate: 2.4% (August 2020)

The country experienced the worst economic downturn in 30 years and with prices that fell by double digits. However, there might be an upswing during 2021 due to an increased interest among Chinese investors.

The Chinese are the main investors in Manila and 41% of all international sales of the large developer Ayala Land goes to Chinese investors. Analysts believe that this might lead to rush-sales and purchases among Chinese investors who look for discounted units.

Sales Fell Greatly in Q2 2020

Sales fell by -49% during the first quarter of 2020 and to merely PHP 1.5 billion (USD 30 million).

Both Megaworld and Ayala Land cut their capital spending in 2020 due to the lockdowns and economic challenges.

While developers launched over 3,000 fewer units compared to 2019, tens of thousands of jobless overseas workers have returned to the Philippines which puts further pressure on the market.

How will Philippines’ real estate market perform in 2021?

The Philippine Central Bank projects that we will see a strong rebound with a 7.8% growth in 2021.

But, the timeline of the distribution of COVID-19 vaccines, and when countries can open, will highly determine how economies and real estate markets perform.

Looking at the analysis done by Colliers International, previous take-up rate targets are unlikely to be met and will reach 300,000 to 600,000 square meters.

At the same time, vacancy rates will increase from 5.5% to 7%, and lease rates decrease by as much as -17% in Metro Manila. The condominium market will face great challenges as well.

We’ve seen an overhang of condominium units especially in the Bay Area, Manila North, Quezon City North, and Pasig City. This will most likely remain in 2021.

Thanks to the low interest rates and mortgage rates, developers will hopefully be able to provide flexible terms to buyers, which can help to support the condominium market in Manila.

What is driving the demand for real estate in the Philippines?

There are several reasons why the real estate market continues to grow in the Philippines. Having one of the fastest-growing economies in Asia, I’ve listed some of the main drivers below.

1. Business Process Outsourcing

The Business Process Outsourcing (BPO) industry is one of the main drivers of the economy in the Philippines. Thanks to its young and English-speaking talent pool, increasingly more foreign companies turn to the Philippines when looking for outsourcing options.

The industry is predicted to double by 2020 and has grown exponentially. Firms from particularly the US, the UK, and Australia invest heavily in this industry.

2. Continuous Supply of Flexible Workspace

The flexible workspace industry is here to stay and will grow tremendously in the Philippines and other Asian countries in the coming decade. It’s said that 30% of all office space will be flexible work-space by 2030.

Colliers believes that the flexible workspace area will expand by 10% at a minimum in the coming three years. Co-working spaces will not only cater to small companies and digital nomads, but also to multinational and outsourcing companies that look for flexibility.

3. Increased Amount of Chinese Buyers

An increased number of Chinese buyers contributes to current and future growth. According to Bloomberg, the gambling/gaming market has attracted around 100,000 Chinese workers to the Metro Manila area since September 2016.

4. High Remittances from Overseas Filipinos

The Philippines is the third-largest recipient of foreign remittances in the world. Overseas Filipinos sent an additional USD 3 billion to their families in 2017 compared to 2016.

With a depreciating peso, and with the increase in foreign remittance, many families now have the purchasing power to buy and invest in the residential property market.


The Philippines’ real estate market has suffered hard in 2020 due to the COVID-19 pandemic and will most likely be in recovery mode in 2021.

While prices have dropped by double digits, we also see reduced lease rates and take-up rates. Tens of thousands of jobless overseas-working Filipinos have turned back to the country, which puts further pressure on the economy.

Hopefully, the market will recover the earliest possible once the country opens its borders. In fact, the country has seen impressive growth in the past years.

The key drivers are: Business Process Outsourcing (BPO) from multinational companies, demand from Chinese investors and other foreigners, increased purchasing power among locals, increasingly more remittances from overseas, and a flourishing gaming industry.

Yields are some of the highest in the region and the country has favorable business and visa regulations. You have the option to apply for plenty of long-term visas, allowing you to stay indefinitely, with low requirements.

If you want to know more about investing in condos in Manila, I also recommend you to read my separate guide.

  • Disclaimer: The content on this website is provided for general information about buying property in Asia, developments, agencies, regulations, taxes, and other related topics. However, we don't guarantee that we keep the content up to date or that it's free from error. We do make mistakes from time to time. We never provide legal advice and financial advice of any sort. is not licensed to deal with any property situated in Hong Kong. We are not an estate agent or salesperson.
  • 5 Responses to “Philippines Real Estate Market Outlook 2021: A Complete Overview

    1. masato tsuru at 6:24 am

      interested in investing but wary of picking the right developer and worried about location and risk of potential earthquake that is projected in the future.

    2. CamellaHomes at 3:31 am

      Thank you for sharing this informative blog of yours. This is really helpful for future real estate investors.

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    4. Carl Gutierrez at 3:00 am

      great article. thanks for sharing this helpful one. real estate is probably a demand right now here in our country. good thing I have my own now in

    5. Buying Condos in Manila: The Ultimate Guide at 1:25 am

      […] Manila’s real estate market has grown much since 2010 since the economy really started to take off. With a 6% – 7% yearly growth the residential sector and office sector have flourished and attracted much foreign investment. […]

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