Before the turn of the century, the Philippine rental housing market was a dynamic industry addressing the needs of the local workforce—who migrated to urbanized areas in search of employment. While not all houses in metropolitan areas cater to renting spaces, it has served as a viable option for those seeking to expand income via contemporary demand—apart from the fact that minimal supervision is needed for such a business. The 21st century presents a notable change in rental demands, wherein practicality has been shadowed by desirability among young professionals and rising high-net-worth individuals (HNWI) who opt for middle-to-luxurious-standard yet affordable housing options.
While Metro Manila continues to be the home of the country’s leading central business districts (CBDs), the emergence of provincial business hubs poses high potential for office space occupancy and demand for apartments as an affordable housing option. Research from CBRE Philippines, a real estate agency, presents that business process outsourcing (BPO) remains the leading driving factor for rising occupancy rates for both Metro Manila and provincial CBDs. From 2023 to 2024, Iloilo, Davao, and Cebu present the lowest vacancy rates—7 to 20% to be exact—in the provincial category; research from KMC Savills highlights that such improvements are manifestations of improved regional connectivity and industrial development via foreign-aided infrastructure projects.
Photo from Panay News
As such, the rental apartment industry is a promising and potential investment opportunity for overseas Filipinos. While the younger workforce is demanding more luxurious condominiums, there is no denying the unquestioned resilience of the humble rental apartment in the preceding decades.
Things to consider when investing in apartments
The continuous expansion of different industries in the Philippines calls for more demand for affordable housing options that fit the standard worker’s salary expenditure structure. While the business process outsourcing (BPO) industry leads the expansion of the workforce in most regions of the country, the emergence of the food, retail, and commercial industries also contributes to housing demands.
The MRT 7 project is one of many transportation infrastructure projects that aim to further urban-rural linkages and support the expansion of different industries by improving the ease of commuting. (Photo from Global Construction Review)
Geographically speaking, it is advisable to follow the direction of the Philippine government's infrastructural projects. These determine the trajectory of urban-regional linkages in the country, which is a glimpse into the future of industry, logistics, and other forms of productivity. Just like any other property, it is also essential to consider the vulnerability of any location to natural calamities—floods being the most common in the Philippines.
Central Business Districts (CBDs) in the country, such as Bonifacio Global City, Ortigas, Makati, and even Cebu, are few of the main drivers of apartment demand, including other forms of residential spaces. (Photo from Patrick Roque via Wikimedia Commons)
Aesthetically speaking, while the modern—and inevitably younger—Filipino local workforce has developed an elevated standard of living, the majority still prefer practicality over desirability. Hence, matters of proximity to CBDs and industrial areas are prioritized over visually pleasing spaces. Despite this, it is still important to invest in the viability of target market desirability—which depends on the roster of tastes and preference of a particular locale.
Financially speaking, while the rental industry requires minimal supervision, regular maintenance is still necessary—which may cost significantly, depending on damages incurred. In this regard, be prepared to face the challenges of calamity resilience, wear and tear of spaces and/or furniture, and other possible concerns that may emerge over time.
