Condominium supply is expected to increase by 143 percent this year, although residential demand across Metro Manila is still being dragged down by the lingering effects of the COVID-19 pandemic. Those were among the findings from Colliers Philippines during its latest Philippine Market Briefing.
The consultancy predicts 8,200 condominium units will be finished in 2021, a significant jump from the 3,370 units completed last year. It was added that an average of 7,500 units annually are set to come online from 2021 to 2025. Nearly 75 percent of this new supply will likely be located in the Bay Area and Fort Bonifacio.
Research from Colliers Philippines found prices fell by one percent during the third quarter due in part to weak demand across the secondary market. That market is being impacted by the continued absence of Philippine Offshore Gaming Operators (POGOs) and expatriates.
Colliers Philippines encouraged investors to take advantage of the attractive payment terms and competitive mortgage rates currently available. As for the Metro Manila residential market recovery, the firm believes this will be slow to start 2022 as the country is still facing several unknowns.
“The recovery of the Metro Manila residential market hinges on the government’s inoculation program, the rebound of the office market, competitive mortgage rates, higher OFW remittances as well as the attractive and flexible payment terms being offered by developers,” Colliers Philippines Head of Research, Joey Roi Bondoc, stated.
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He continued, “The government-projected economic rebound in 2021 and completion of infrastructure projects should also play a pivotal role in pump-priming the secondary market. Developers should be relentless in lining up projects and landbanking in key locations to maximize market recovery beyond 2021.”
Homebuilders will also need to be creative to generate sales in the short term. Bondoc cited promotions and flexible payment schemes as ways developers can attract more homebuyers. Several methods, such as lease-to-own terms for RFO units and zero percent interest on down payments for up to five years, have proven to be successful during 2021.
Another trend seen by Colliers Philippines this year is developers improving or reimagining condominium amenities to suit the “New Normal”.
“Some provide flexible workspaces with stable internet connection to satisfy the needs of unit owners who work from home and with kids doing homeschooling. Other features include the use of QR codes for user log in to avoid virus transmission, use of apps for payments and updates; and installation of safety barriers,” Bondoc explained. “Developers should highlight employing reputable property managers who ensure that safety and health protocols are being followed.”
