26% INCREASE?

Okay, so a client forwarded a Bloomberg article to me, asking if it were true that Manila luxury condos registered a 26% increase year over year.

Frankly, we're not seeing these kinds of increases in the primary (through developer price increases) or secondary markets.

The number came from a reputable institution, so there must be some truth to it. My lingering question is, how did they derive the 26% increase?

So, I gave it some thought, and I got an idea of how.

They likely compared an up-and-coming pre-selling ultra-luxury condo being sold for ~P800k/sqm to the last most expensive condo launched by a different developer (~P630k/sqm).

[Interestingly, the P800k/sqm project is only offered to select individuals—the developer's Board pre-approves which clients it is offered to.]

If my hunch is correct, I'm not sure if you could have these two projects represent the whole luxury condo segment.

Anyway, here's what we're seeing in the secondary market. The second image above shows the average prices of an ultra-luxury condo complex in Makati. Prices continue to be in an uptrend (+6 to 8% year-on-year) but far below the 26% that the article claims. Moreover, notice how average prices have remained below the P300K/sqm mark. This level, I believe, is the condo complex's primary resistance level.