Santos Knight Frank: Luxury property market to remain strong

Amid reports that posh residential properties could suffer a slump due to corruption controversies, global real estate services firm Santos Knight Frank said high-end properties will continue to be in demand across local and international markets.

“The residential market has been extremely resilient. We deal with supply and demand, and there is a demand for the high-end residential market. It will continue to be a demand, whether it’s from local or international (Chinese, American, European) investors. And also, with interest rates being lowered, we always see buying and selling,” said Rick Santos, chairman and CEO of Santos Knight Frank, in a media briefing Wednesday in Makati City.

Speaking about shifts in the market, Santos added: “Every six years we see a shift in who’s in power and exits in power.”

“So, we don’t see any massive shifts in the market that’s going to change the trajectory that we’re on. The residential market is not liquid, as the stock market, you see, is very volatile. It’s a generational asset. So, there will be a lot of changes in politics; some will lose money, while some will make a lot of money. Wealth will be passed on, and there will be a lot of turnover, especially in the high-end sector,” he said.

Manila retains its place in the global luxury landscape, ranking 5th in Knight Frank’s Prime Global Cities Index, supported by a 9.1 percent year-on-year price increase—highlighting its status as an affordable yet fast-appreciating luxury market.

Forbes Park remains the most expensive prime village in the country at P830,000 per square meter as of 2025, followed by Dasmariñas Village (P750,000/sq.m.), Urdaneta Village (P650,000/sq.m.), Bel-Air Makati (P600,000/sq.m.), San Lorenzo Village (P500,000/sq.m.), Magallanes Village (P380,000/sq.m.), and Ayala Alabang Village (P380,000/sq.m.).

Colliers earlier revealed that the ongoing flood control controversy involving government officials and contractors has negatively affected luxury property sales, as officials and their “nepo families” are holding back on high-value purchases to avoid public scrutiny. Luxury and upscale condominium sales in the third quarter were also significantly affected.

Projects outside Metro Manila

Developers are increasingly positioning new projects just outside Metro Manila as buyers seek more space, improved livability, and more accessible price points.

This shift is driving activity in nearby growth corridors, where developers are introducing both horizontal communities and mid-rise residential formats to meet evolving demand.

Meanwhile, Metro Manila’s pipeline continues to be defined by premium developments, including Ayala Land Inc.’s Laurean Residences and Megaworld’s Uptown Modern, both targeted for completion in 2030.

Office space

Santos Knight Frank said office space absorption has increased this year due to the IT-BPM sector, with year-to-date net absorption reaching 461,245 sq.m., driven largely by industry expansions.

Metro Manila’s office stock now totals 8.9 million sq.m., with an additional 328,000 sq.m. delivered as of November 2025.

The region’s office pipeline remains robust, with more than 1.5 million sq.m. scheduled for completion through 2029—primarily in Quezon City, Taguig, and Ortigas—though developers are adjusting timelines in response to tempered demand.

Santos Knight Frank said the Philippine real estate sector continues to present “silver linings” amid global volatility and local controversies.

The firm said strengthened policy reforms, the Philippines’ emergence as a hub for AI-driven enterprises, and ongoing improvements to the REIT framework are boosting investor confidence and signaling long-term resilience.

“Looking at 2025, it’s clear that this has been a year marked by purposeful pivots and structural shifts across the Philippine real estate landscape. The signing of the 99-year land lease into law, along with progressive amendments to the REIT framework, signals a strong policy environment—one that broadens the universe of acceptable assets and unlocks new channels for long-term investment,” Santos said.

“We’re seeing growth decentralize, with major developments rising in Cebu, Pampanga, Davao and New Clark City—signaling a more diverse economic trajectory. Across sectors, the market is recalibrating: office supply continues to expand, hospitality is enjoying one of its strongest cycles, retail is moderating, and residential pressures are opening attractive opportunities in the secondary market,” he added.

Through these shifts, Santos maintained that the Philippines remains a market defined by resilience, reinvention, and untapped potential.

“And even amid calibration, 2025 presents clear silver linings—opening new pathways for renewed confidence and long-term, sustainable growth,” Santos said.