According to Colliers International, real estate investors are taking the bulk of pre-sales in the affordable and middle-income condominium market.
According to Colliers Research manager Joey Bondoc, repeat buyers, whose intention is to grow their income through property value appreciation are buying off condo properties in the P1.7 million to P5.9 million price range. He also said that due to this overwhelming demand from repeat buyers, some developers are opting to raffle off units to loyal customers.
Bondoc said pre-sales this year will likely remain strong given the strong end-user demand.
“However, topping the 2018 sales figures might be a challenge given Colliers’ projected slowdown in launches due to the dearth of available developable land in Metro Manila and the continued acceleration of land prices in the country’s key business districts. We also see slower launches having a spill-over effect on take-ups in 2020 and 2021,” he said.
Bondoc said this has led developers to maximize their projects by offering units of smaller sizes to offset the impact of high land prices in key areas of the metro.
Colliers said pre-sales of condo units in major business districts in Metro Manila and the fringes reached 54,000 units, surpassing the previous record-high of 53,000 units in 2017.
Bondoc said demand has been outstripping supply in the past four years, even in last year’s environment of high inflation and the central banks’ decision to raise benchmark yields.
Inflation has decelerated starting in November last year from an annual rate of 5.2 percent in 2018 and the central bank is now forecasting a rate of between 2 and 4 percent in 2019.
“With subdued inflation we do not see the central bank raising benchmark yields over the next 12 months and this should sustain demand in the affordable to mid-income residential segments over the next 12 to 36 months,” Colliers said.
Bondoc, however, said that there are still those who are buying to flip the project after completion.
“There are those who buy the units for their sons or daughters as well,” he said.
Source: Malaya Business Insight
