Gentrification is only to go more intense. How does gentrification affect property prices_ - 1024 by 400


What is gentrification?

Gentrification is the process of transforming a low-value urban neighborhood into a high-value one. It is, in essence, the rapid development of a city over a short period of time. What accompanies gentrification is often the displacement of a neighborhood’s old residents and the inflation of real estate prices. A lot of cities all over the world experience gentrification, which greatly impacts the housing market.

In the Philippines, for example, gentrification has swept across key cities especially Metro Manila. Once sleepy neighborhoods have been transformed, over time, into commercial districts that leveraged on the local consumer market. Places such as Poblacion (Makati) and Maginhawa (Quezon City) have emerged from their residential identities into retail and leisure destinations with a thriving commercial real estate.

Why gentrification happens

Rapid job growth and an increase in traffic congestion are some of the reasons why gentrification happens. In particular, traffic congestion can increase commute times and decrease the overall quality of life which paves the way for gentrification.

Effects of gentrification

Gentrification can bring about the commercial and economic development of a given area as more businesses relocate and as more infrastructures get built. This gives more work opportunities for people both inside and outside key cities.

Accessibility is another effect brought about by gentrification as public transportation options increase and the travel time to do leisure activities like shopping, dining, etc is decreased. With more affluent people moving into the area, it tends to become more desirable for people in the same socioeconomic bracket.

Gentrification can bring about an increase in property values as real estate development begins. Investors can make a profit by investing in these gentrified areas before they reach their full potential.

Gentrification in the Philippines

The Philippines is no stranger to gentrification, having bore witness to the transformation of some of its well-worn locations into bustling streets of activity. 

An example is Poblacion, Makati—a 102-hectare residential barangay located in between the famous Kalayaan and Jupiter Streets. Included here is the Rockwell Center which many years back had turned into a commercial mixed-use hub full of hole-in-the-wall restaurants and bars. The transformation of the once quaint neighborhood into a place-to-be has highlighted some of its effects such as the problem of parking in a mostly residential area and the rising price of properties. The same can be said for the areas of Kapitolyo and Maginhawa, which are now both known for their commercial establishments.

Closing thoughts

Gentrification is an inevitable phenomenon as areas continuously develop. Property owners in these key areas, can either develop their property into a commercial concept or put it out for sale or lease in the market for those who wish to invest in the area.

Santos Knight Frank is a renowned real estate services company that offers valuation, research & consultancy, brokerage, property management services, and more. Learn more by visiting

Find media contacts, and get access to news releases and announcements.

About Santos Knight Frank

Santos Knight Frank provides global real estate services. Since the company first opened its doors in 1994, it has become the Philippines’ first and largest fully integrated real estate services provider, with clients that include multinational corporations and institutional investors, as well as occupiers, owners and developers of real estate locally and across the globe.

The company’s partner, Knight Frank, is the largest independent global real estate consultancy. Founded in 1896 and headquartered in London, Knight Frank operates in more than 523 offices in 60 countries across the globe, including the strategically important partnership with Newmark Knight Frank in the U.S. (with Newmark Cornish & Carey in the West Coast).