Developers seen slashing residential condo prices
Residential condominium prices are likely to fall by 15 to 20 percent this year as developers may prioritize quest for market share over profitability during the coronavirus pandemic, giving an opportunity for end-users and investors to buy at better prices.
This is according to private investment firm Januarius Holdings Inc. led by businessman Januario Jesus Atencio, former president of mass housing developer 8990 Holdings.
Atencio sees raw land as well as house and lot offerings to continue to enjoy robust demand.
Atencio said the high-rise residential segment was likely to be the property segment most sensitive to the COVID-19 pandemic that had infected close to four million and killed more than 250,000 people worldwide.
“I wouldn’t be surprised if there is a 15 to 20-percent decrease in sale prices or sales volumes, he said. “These price drops will manifest themselves in many ways: straight discounts, sales promotions, freebies, add-ons, better customer service etc.,” Atencio said.
“It’s going to be about getting market share, not so much maximizing profitability,” he said.
Once the enhanced community quarantine is lifted, Atencio said property developers would gear up to regain market share. Metro Manila has been locked down since mid-March.
One of the many ways to get back market share is to give great discounts, he said.
While the metropolis is locked down, Atencio said the recent decline in interest rates would not matter than much yet.
“In the Philippines, the BSP (Bangko Sentral ng Pilipinas) has made certain monetary policy moves so we just have to wait for the banks to act on it in terms of lowering interest rates. But the thing is, we are in a lockdown so even with low interest rates, how can you spend money for your business when you are not going to work?” he added, noting a lag in the transmission of easier monetary policy on the real economy.
In a concept paper, Januarius Holdings is pushing for the resumption of housing development projects through the creation of quarantined production units (QPUs) to ensure business continuity not only for the sector but also for the Philippine economy as a whole.
It said housing development projects would be recognized as QPUs and accredited by the Department of Human Settlements and Urban Development to build houses despite the ongoing quarantine period.
Under the proposal, identified workers and staff contained in the quarantine production units will be provided with board and lodging and will not be allowed to depart the area. Likewise, the area will not be accessible to persons not belonging to the quarantine production units.
“Any person, material or equipment from the outside community shall be thoroughly inspected, disinfected and sanitized before allowing entry into the quarantine production units,” it added.
Social distancing among personnel as well as health and safety procedures of the Department of Health as well as the Department of Labor and Employment will be strictly followed, based on the proposal.
“The QPUs shall be kept safe and COVID-19-free by applying social distancing and other personal and administrative health and safety procedures,” it added. —DORIS DUMLAO-ABADILLA
