AS the amount of developable land in Metro Manila shrinks, so do the sizes of abodes in the country’s capital region, industry players have observed.

According to online property portal Lamudi Philippines, 42 and 41 percent of Metro Manila’s for-sale and for-rent condo inventories have floor sizes measuring 50 square meters or less—an apartment size many would consider as “shoebox.”

The listing website attributed the trend to the scarcity of developable land in Metro Manila, caused by the continued rise in population in the national capital region.

“While it is not completely gone, local real estate is barely keeping up with the region’s continued increase in population, which has been the highest in the entire [Philippines],” Lamudi said.

It noted that while the National Capital Region accounts for 12 percent of the country’s population, it only occupies a mere 0.21 percent of the country’s total land area.

“This has resulted in the current trend, where vertical developments are mostly what is built in the metro, as high-rises do not require copious amounts of land,” Lamudi pointed out.

The shoebox trend has started about a year ago, though.

As far back as the fourth quarter of 2014, global property advisor Colliers International forecast in a report that smaller sized units “are set to dominate the residential market in the next four years.”

Colliers noted that studio and one-bedroom units accounted for close to 75 percent of the new supply at that time.

The global property agent said these were among the 30,000 pre-selling condo units expected to be delivered from 2015 to 2018 in the central business districts of Makati, Fort Bonifacio, Rockwell, Ortigas, and Eastwood in Quezon City.

The condo sizes, Colliers said, ranged from 18 to 90 square meters. Some condo projects outside the CBDs, it added, have even been reported to sell units no bigger than 15.5 square meters.

Colliers said majority of these units cater to young urban professionals and investors seeking to diversify their portfolios.

“It seems that going smaller is the trend now for Metro Manila’s condo market,” the Makati chapter of the Real Estate Brokers Association of the Philippines (Rebap) said in its website.

The group quoted Pinnacle Consulting’s research head Jose Romarx Salas as saying that “back in the 1990s, a condo project that squeezes in 200 units per tower was virtually unheard of. Now, it is becoming the norm, with some developers launching projects with more than 30 condo units per floor or approximately 1,200 condo units for a 40-story high-rise.”

Quezon City has the greatest proportion of “shoebox” condos, based on Lamudi’s inventory—72 and 67 percent of the city’s for-sale and for-rent condos, respectively, mostly newly built.

In Makati, 31 and 34 percent of for-sale and for-rent condos, respectively, are smaller than 50 square meters, while in Taguig, the proportions are 26 and 32 percent, respectively.

In Makati, most inventories are either from older condos, which have larger units, or from high-end ones, which have fewer units per floor.

“Cost-wise, smaller does not necessarily mean cheaper, at least when you look at the per-square-meter prices of these apartments,” Rebap noted.

Lamudi said prices for the shoebox- type of property still commands the highest prices for both for-sale and for-rent properties in the NCR.

“In the same analysis conducted by Lamudi, Makati turned out to have the highest average asking price of small condos at P132,073 per square meter, slightly lower than the city’s overall average of P139,503,” the online portal said.

In contrast, average prices for smaller condominium units in Quezon City and Taguig are slightly lower at P123,431 and P118,634 per square meter, respectively.

Meanwhile, Lamudi said smaller apartment spaces do not lead to lower rental rates, as rents of smaller apartments in Quezon City, Makati and Taguig, stand at P601, P892 and P769 per square meter a month, respectively, while overall average rates in the respective cities are at P571, P832 and P835.

Lamudi said the lack of developable area in Metro Manila is one of the factors driving developers to create projects outside of country’s capital.

Another factor influencing the development of projects outside of Metro Manila according to Lamudi is the unbearable traffic situation in the capital.

Lamudi noted that the traffic caused by various factors such as the vast population, lack of solid planning and infrastructure, and as well as inefficient services of rail transportation.

The property-listing site noted that moving development outside of Metro Manila is easier said than done, since most of the country’s government and financial operations are still centered in Metro Manila.

But it mentioned that with the development of several access points in the country, areas outside Metro Manila may soon get more attention.

“With continued progress of access points like the North and South Luzon Expressways and the Tarlac–Pangasinan–La Union Expressway, areas neighboring Metro Manila have begun receiving serious consideration for development,” noted Lamudi.

Source: The Manila Times | January 17, 2016

http://www.manilatimes.net/mmanila-condos-shrink-to-shoebox-sizes/239856/