While prices of residential units are “plateauing” already, developers are still continuing their development binge due to the projected demand from at least 3 million Filipino buyers.
These home buyers represent half of the 6 million housing backlog in the country today, according to Pinnacle Real Estate Consulting Services Inc. (Precsi) Director of Research and Consulting Jojo Salas.
“The big players are still building due to the huge housing backlog. Approximately, half of the 6 million with housing needs can afford to buy,” he said.
Salas presented the Pinnacle Real Estate Market Insight report for the second quarter of 2017, with data from the Bangko Sentral ng Pilipinas (BSP) incorporated.
Salas said the country’s residential property values slightly grew by an average of 1.1 percent in the first three months of the year from the same period in 2016.
The Residential Real Estate Price Index (RREPI) edged higher by 1.3, from 115.9 in the January-to-March period last year to 117.2 in the similar quarter in 2017.
Comparing it to the base level of “100” in the first three months of 2014, residential-property prices grew by 17.2 percent.
“While the increase [from 2014] is substantial, the slight increase from the first quarter of 2016 means that prices are ‘plateauing’,” he said.
Pinnacle’s study estimates that residential condominium units in Metro Manila could total 240,000 by December 31.
Major player SM Prime Holdings Inc., the pioneering homegrown company with P1 trillion in market capitalization, will launch residential units anywhere between 15,000 and 18,000.
The Ayala Land Group, with P100 billion worth of projects this year, is set to introduce into the market P40 billion worth of housing inventory, consisting of 16 new projects under its Alveo brand.
Megaworld Corp, which comes third at P146.36 billion, will be developing a P30-billion 35.6-hectare township in San Fernando, Pampanga, in the next 10 years, combining residential towers, office buildings, a mall, retail hubs, school, ampitheater and events venues.
Banking on stronger-than-expected market demand, Vista Land Group upgraded its target offering to the property market from P30 billion to P42 billion worth of real-estate projects this year, including P12-billion property developments in the first quarter.
“The top developers have been leveraging their sizes to achieve an economy of scale. While most of them would be offering attractive rents and prices for their products, one of their eyes would be watching on the quality of their offerings. Buyers and tenants will remember unpleasant turnover conditions. In addition, efficiency of operations and maintenance are likewise viewed highly by occupiers,” Salas noted.
Small and medium players, on the other hand, are waiting for the implementing rules and regulations to get the green light, as well as the price ceiling, for vertical socialized-housing projects.
The BSP reported that loans released by both universal and commercial banks to property buyers
totaled P1.31 trillion during the first quarter ending March 31. This represents an increase of 21.5 percent for the same period last year.
“Again, this substantial increase shows that there are more people buying, and they are being financed by the banks,” said the director of research and consulting of Precsi.
Source: http://businessmirror.com.ph/residential-developments-still-rising-on-housing-gap/
