Array
Money Matters

Invest Wisely: Buy A Condo Unit Outside CBDs

Property analysts see opportunities for investors in locations beyond Makati, BGC and Ortigas

Shares
Photography: Michael Angelo Chua (Main Photo) | Pexels

Are you planning to spend your bonus by buying a condo unit? While many condominium buyers tend to focus on central business districts (CBDs) so they can be closer to their offices, property analysts said those looking to buy for investment (either to rent out or sell when prices rise), may find more opportunities buying a condo outside the CBDs.

In its market report for the second quarter of 2017, property consultancy Colliers International Philippines revealed that they see potential in residential condominium projects located outside of the three major CBDs in Metro Manila: Makati, Bonifacio Global City (BGC) and Ortigas Center due to the lower prices and potentially faster capital appreciation.


“We recommend potential buyers, investors and tenants to consider areas outside CBDs,” wrote Dinbo Macaranas, senior research manager at Colliers, in Colliers’ residential market report for Q2 2017. “This is because these alternative locations offer competitive rents and prices, as well as better capital appreciation potential given the availability of developable land in these locations and the impact of future infrastructure improvements.”

Macaranas highlighted major developments in Pasig, Malugay Street in Makati and the Manila Bay Area with capital appreciation growth ranging from five percent to 21 percent quarter-on-quarter. In contrast, he noted that prices seem to be plateauing in residential properties within the major CBDs. For Q2 2017, Colliers noted a slowdown in the capital appreciation of condominiums in Makati CBD and BGC, with quarter-on-quarter capital value growth averaging at 3.1 percent and 0.2 percent respectively. That is lower than Q1 2017’s figures of 3.2 percent for Makati CBD and 2.7 percent for BGC.

As a result, residential rental yields in these CBDs have been declining. But Macaranas is quick to clarify that the Philippines’ overall yields is still among the highest in Southeast Asian countries at 5.5 percent, second only to Vietnam’s 5.7 percent.

ADVERTISEMENT - CONTINUE READING BELOW

Macaranas urges investors to look at residential developments in other locations. Colliers noted that for the first half of 2017, around 84 percent of residential project launches were located outside the major CBDs. Macaranas highlighted projects in Quezon City, Parañaque and Manila as examples of big-name property developers moving outside of the major CBDs.


Similarly, 89 percent of pre-selling take-up in the first half of 2017 happened outside CBDs. Colliers further noted that majority of take-up in the first six months have focused on the affordable (units priced between Php1.7 million to Php3.2 million) and mid-income (units priced between Php3.2 million to Php6 million) segments, which are the usual price points in these alternative locations. These two segments made up 77 percent of the total pre-selling take-up in the first half of 2017.

“The areas outside of the metro’s major CBDs where these affordable and mid-income projects are located are emerging as growth areas,” wrote Macaranas in the report. “The lack of developable land in CBDs has naturally pushed the development outward.”

Macaranas added that such factors make these areas an alternative opportunity for property buyers and investors. “If you compare them, there’s essentially a discount between the major CBDs and the areas outside CBDs,” he said. “That’s why there’s an opportunity there that we see that buyers and investors can take advantage of.”

 

*****

Lorenzo Kyle Subido is a staff writer of Entrepreneur PH

This story originally appeared on Entrepreneur.com.ph.

* Minor edits have been made by the Realliving.com.ph editors.

More on Realliving.com.ph

Shares

Latest Stories

What Is A Sunroom And How Do You Make One At Home?

Build a special, relaxing little sunroom for your home with the help of these five pieces

Cainta Is Opening A Skate Park Soon

It will definitely add a new facet to the municipality

South Folks, Expect Heavier Traffic Along SLEX in the Coming Months

It's part of another #BuildBuildBuild project.

How To Choose The Right Pieces For Your Living Room

Whether you're looking for a sofa, an armchair, or much more, get ideas from this newly launched BGC store

6 Common Kitchen Organizing Mistakes and How to Solve Them

Stop hoarding pretty dinnerware!

How Much Do Filipinos Plan to Spend this Holiday Season?

Mobile shoppers are likely to splurge more, according to a survey conducted by Facebook Philippines

Check Out This Colorful Beach Resort in Baler

Presenting the location of your next fun weekend escape with the gang

Pinoy Designers Share Their Spooky Experiences On Projects

These design professionals share hair-raising experiences they had in homes and buildings they had worked on in the past

4 Simple Things You Can Do To Lessen Your Aircon Usage

You don't always have to turn on your AC to bring the heat down in your home

How to Liven Up an Industrial-Inspired Space with Plants

Let's revisit the peg-worthy Hectare One office for ideas

6 Wonderful, Under the Radar Things to Do in Bohol

Whether you're a single traveler, on vacation with a partner or with your family, try these underrated experiences in Bohol.

Shop Local At This Instagram-Worthy Lifestyle Store In BGC

Get unique local finds, from pillowcases and home scents to pottery and gin-and-tonic kits at Frankie and Friends General Store
Load More Stories

Get inspiring design ideas and handy hints.
Subscribe to our newsletter now!