Last year’s demand for residential condominium units has exceeded what property developers were able to bring to the market, despite high consumer prices and interest rates.
Joey Roi Bondoc, Manager for Research for the property consulting firm Colliers Philippines said that condominium pre-sales in areas around major central business districts reached 54,000 units in 2018. Such figures have increased from 53,000 in 2017, noting the high demand for affordable to middle-income units or those within the P1.7 million-P5.9 million range.
The number of residential condominium units sold before the properties’ completion last year is even higher than the 43,000 new pre-selling units offered by the developers. An increase in the number of newly launched inventory has also increased from 35,000 in 2016 to 36,000 in 2017.
High demand to continue this year
Colliers believes that this high demand for the affordable and mid-income residential segment is likely to be sustained this year. The country’s favorable inflation environment this year will presumptively prevent the local central bank to increase interests’ rates.
However, the consulting firm also reported that it might be hard to replicate the record take up for this year. This is likely to happen as the insufficiency of available lands in the Metro Manila area, and the soaring prices of real property in the major central business districts may slow down new launches.
Development goes outside Mega Manila
Thus, Colliers urges residential property developers to look for opportunities in other fringe areas in the country, as some of them have done so by looking in areas like Pampanga, Cebu, or Davao.
The Manila Bay area is also seen to overtake the residential condominium market in Makati Central Business District because of the strong demand from Chinese investors.
Bright prospects are also projected in the Ortigas district as new residential towers will likely complement the development of new office spaces within the said area from 2019 to 2021.