Investing in Hyper Luxury Properties: The Expanding Philippine Real Estate Market

The Philippine real estate market is one of the most dynamic in Southeast Asia. It is driven by a number of factors, including a growing economy, a young population, and a high demand for housing.

The residential real estate market is the largest segment of the Philippine property market, accounting for about 70% of total transactions, with a particular focus on hyper luxury properties. These high-end properties, which cater to the ultra-wealthy, offer a unique investment opportunity for those looking to diversify their portfolios and capitalize on the expanding market.

What are hyper luxury properties?

Hyper luxury real estate is typically priced at over ₱100 million. These properties offer the best of the best in terms of amenities, location, and design. They are typically located in prime areas and offer amenities such as 24-hour security, concierge service, and private pools.

Hyper luxury properties are characterized by a combination of exceptional features, amenities, and architectural designs that cater to the needs and desires of high-net-worth individuals. Some of the key characteristics of hyper luxury properties include:

1. Prime location: Hyper luxury properties are often situated in prestigious neighborhoods or areas with stunning natural beauty, offering panoramic views and easy access to local amenities.
2. Spacious living areas: These properties typically feature large living spaces, such as living rooms, family rooms, and entertainment rooms, providing ample space for relaxation and socializing.
3. High-quality materials and finishes: Hyper luxury properties are built using top-of-the-line materials and finishes, ensuring durability, elegance, and a sense of exclusivity.
4. State-of-the-art technology: These properties often incorporate cutting-edge technology, such as smart home systems, advanced security features, and energy-efficient appliances.
5. Customization and personalization: Hyper luxury properties often allow for extensive customization and personalization, enabling owners to create a truly unique living environment tailored to their preferences.
6. Wellness amenities: Modern hyper luxury properties may include dedicated exercise or workout spaces, spa facilities, and other wellness features to promote a healthy lifestyle.
7. Outdoor living: Expansive outdoor living spaces, including landscaped gardens, swimming pools, and outdoor entertainment areas, are common features in hyper luxury properties.

The Growth of the Philippine Real Estate Market

The Philippine real estate market is one of the fastest growing in Asia, with a GDP growth rate that has remained steady at 6% since 2012. The country’s increasing economic prosperity has resulted in a rise in demand for luxury properties and contributed to an increase in tourism numbers.

Additionally, many foreign investors have chosen to invest in Philippine real estate due to its proximity and accessibility from other Asian countries such as Japan and China where there are large populations who want access to high-end properties but cannot afford them locally due to high real estate prices.

In general, the growth of the Philippine real estate market can be attributed to a combination of economic growth, demographic trends, infrastructure development, remittances from OFWs, the BPO industry, tourism, and foreign investments. These factors are expected to continue driving the market’s expansion in the coming years.

Hyper Luxury Properties in the Philippines

The Philippines is experiencing steady economic growth due to its young population (half of whom are millennials) as well as its strategic location between China and Japan–two countries with booming economies that have been investing heavily in the Philippines’ real estate market over recent years.

The luxury real estate segment has seen resilient and consistent performance in recent years, and it is expected to remain steady. A hyper- luxury apartment market is emerging in the Philippines, according to Leechiu Property Consultants, a private real estate brokerage company.

Accordingly, there has been an increase in construction projects around Manila Bay where many hyper luxury homes have been built along with hotels such as Mall of Asia Arena (MOA), Resorts World Manila & Casino Complexes which includes casino hotels such as City Of Dreams Manila Casino Hotel & Resort; Solaire Resort & Casino; Okada Manila Hotel And Casino Complexes among many others.

Investing in Hyper Luxury Properties

Investing in hyper luxury real estate properties is a great way to diversify your portfolio and increase value. The market for luxury real estate has grown exponentially over the past decade, with many countries experiencing record sales numbers. It’s no surprise that investors are looking for new ways to get involved with this lucrative field–and why not? After all, investing in high-end properties can be extremely profitable if you know what you’re doing.

Some of the key reasons to consider investing in hyper luxury properties include:

• High demand: The global market for luxury properties is growing, driven by the increasing number of high-net-worth individuals and their desire for exclusive and high-quality living spaces.
• Strong rental yields: Hyper luxury properties can provide attractive rental yields, as affluent tenants are willing to pay premium prices for exceptional living spaces and amenities.
• Capital appreciation: These properties are often located in prime areas, which can lead to substantial capital appreciation over time due to land scarcity, increasing property values, and the desirability of the location.
• Diversification: Investing in hyper luxury properties can help diversify an investment portfolio, reducing risk by spreading investments across different asset classes and geographic locations.
• Prestige and social status: Owning a hyper luxury property can be a symbol of success and social status, attracting high-net-worth individuals, influential clients, and potential business opportunities.
• Limited supply: The supply of hyper luxury properties is often limited, which can lead to higher demand and stronger price growth over time.
• Resilience during economic downturns: Hyper luxury properties tend to hold their value better during economic downturns, as high-net-worth individuals are less likely to be affected by market fluctuations.
• Potential for tourism and hospitality ventures: In popular tourist destinations, hyper luxury properties can be turned into high-end vacation rentals or boutique hotels, generating additional income and attracting affluent travelers.

As the Philippines continues to grow as a tourist destination and economic powerhouse in Asia, more and more real estate developers and more people are looking to invest in properties here. Investors should take advantage of this opportunity now because there are many good options available at reasonable prices compared with what you would pay for similar properties elsewhere in Asia Pacific or Europe/America (the world’s major markets).

Risks and Challenges

Of course, there are also some risks associated with investing in hyper luxury properties. These properties are typically more expensive than other types of properties, and they can be more difficult to sell if you need to move. However, the potential rewards can be significant, and for those who are willing to take on the risks, investing in luxury properties in the Philippines can be a wise decision.

Here are some additional tips for investing in hyper luxury properties in the Philippines:

• Do your research: This includes understanding the demand for luxury properties, the supply, and the potential for capital appreciation.
• Work with a qualified real estate agent: A qualified real estate agent can help you find the right property for your needs and budget.
• Consider your investment goals: Before you invest in any property, it is important to consider your investment goals. Are you looking to live in the property? Are you looking to rent the property out? Are you looking to sell the property for a profit?
• Be prepared to pay a premium: Hyper luxury properties typically come with a premium price tag.
• Be patient: It may take some time to find the right property and to sell the property for a profit. However, if you are patient and you do your research, you can make a wise investment in hyper luxury properties in the Philippines.

The Future of Hyper Luxury Properties in the Philippines

As the country’s economy continues to grow and middle class consumers continue to prosper, there will be more demand for high-end homes. As a result of these trends and others, we expect that the hyper luxury market for real estate will play an increasingly important role in shaping how people live and work throughout Southeast Asia by 2030:

• Hyper Luxury Homes will become more common across Asia Pacific as economies expand
• High Net Worth Individuals (HNWIs) will invest heavily in new developments because they see them as good investments

Driven by factors such as economic growth, urbanization, foreign investment, infrastructure development, and changing lifestyles, the future of the Philippine luxury property market shows a lot of promise.

There are a number of major developers that have invested in the Philippines, focusing on building luxury properties including condominiums, mansions and resorts. The government has also taken steps to encourage investments in this sector by relaxing foreign ownership restrictions on real estate investments.

However, the rise of hyper luxury real estate also has some negative implications. It can lead to gentrification, as wealthy buyers displace lower-income residents. It can also contribute to inequality, as the gap between the rich and the poor widens. Additionally, it can lead to environmental problems, as developers clear land for new construction. Developers and the government will need to continue working together to create a conducive environment for the growth of this market segment.