The luxury and mid-market property segments drove pre-sales in Metro Manila during the first three quarters of 2020. According to research from Colliers International, 85 percent of total pre-sales took place for residences in these two segments.
This is up significantly from the previous two years when luxury and mid-market property accounted for 68 percent of pre-sales in Metro Manila. Colliers International notes that properties priced at PHP3.2 million or above are considered to fall into this category.
“Despite the pandemic, projects in the mid-income and luxury segments showed resilience in the first nine months. The segments accounted for 89 percent of total launches during the period,” Joey Roi Bondoc, Senior Research Manager at Colliers, told the Philippine Daily Inquirer. “In our view, demand in the residential sector in 2021 will likely be driven by mid-income to luxury projects.”
He added that data from Colliers International revealed 86 percent of luxury and mid-market property developments set to be completed between now and 2022 had been sold. More than 75 percent of new supply will be located in Bay Area. Fort Bonifacio, Alabang, Ortigas Center and Makati are all expected to add supply moving forward as well.
Construction delays due to the COVID-19 pandemic mean an estimated 6,000 units will be delivered in 2020, down from Colliers International’s projection of 14,720 units. The consultancy believes this figure could rise by more than 20 percent in 2021.
Bondoc is optimistic about the property market this year. He cited a recovery in OFW remittances, stronger office leasing and lower mortgage rates as reasons to be optimistic. Assuming this happens, real estate prices and rents would increase after a down year.
“As we expect an increase in demand, we see prices and rents recovering. By end 2021, we project prices and rents to grow by 1.7 percent and 2.1 percent, respectively, a reversal from -13 percent and -7.7 percent in 2020,” Bondoc explained to the newspaper.