Residential sales and lease demand maintain positive momentum

• Demand in the residential lease market remained positive with a net absorption of 390 units in Q3 2024. The majority of move-ins came from foreign and local executives. Most of the firms continued their hybrid work arrangements.
• Similarly, sales demand in the residential market remained afloat as foreign and high-net-worth local investors showed interest, especially in the central business districts of Makati City and Taguig City.

New supply in Taguig City; vacancy increases slightly

• Residential supply grew by around 478 units in Q3 2024. Newly turned-over units came from Park McKinley West – Tower B in Taguig City. New developments in the central business districts of Taguig City will add 553 more units by year-end.
• The vacancy rate recorded a slight increase and settled at 7.2%, a 7.47 bps increase q-o-q, as newly turned-over units pushed vacancy upwards.

Rents grow while capital values shrink

• Rents expanded minutely by 0.1% q-o-q, coming up to PHP 843.0 per sqm, per month. Stable demand enabled some unit owners to push rent upwards.
• On the other hand, capital values remained nearly unchanged and settled at PHP 295,771 per sqm in Q3 2024, as the market continued to stabilise.

Outlook: Rents and capital values may continue to grow, albeit slowly, in the near term

• Stable leasing by executives may reduce vacancies. However, RTO rates are likely to remain steady due to hybrid work. Meanwhile, sales demand may rise with a potential easing of interest rates. Further, new supply by year-end 2024 may temporarily increase vacancy.
• Rents are expected to grow further, driven by sustained demand from both local and foreign executives as well as high-net-worth individuals. Similarly, capital values may experience growth as new prime assets get turned over in the coming quarters.