SMDC is one of the first property developers to offer affordable condominium units.
There is a grain of truth when the Philippine property sector claimed months ago that the good years are back.
Owing to the increased investments and local economic activity, there had been a steady surge in demand for more office and residential spaces in the country. And just as the year 2011 is about to end, there seems to be no signs of slowing down for the property sector.
CB Richard Ellis Philippines disclosed that it is tracking approximately 135,000 condominium units for completion between 2011 and 2016. Of these condominium units, 31 percent are said to have been sold at a price range of P40,000 to P80,000 per square meter. These, CBRE added, are predominantly studio and one-bedroom units with an average floor area of 30 to 40 square meters each.
This steady surge in demand for spaces can be partially attributed to the middle-income market, which has begun shifting its housing preference toward condominium developments. The proliferation of the affordable “high-density vertical subdivision complex” in Metro Manila over the last five years has since changed the first-home preferences of newly formed household or the so-called “start-up families,” according to CBRE Philippines.
Relatively new
“Mid-market condominiums are relatively new to the market given that the earlier condominium projects come with bigger sizes and are sold at a higher price. Previously, condominium ownership is limited to the upper class given its restrictive acquisition cost,” CBRE Philippines noted.
AMENITIES of Escalades South Metro make mid-market condos more appealing to buyers.
“However, the advent of mid-market condominium in the fringe of the business districts across Metro Manila has opened up a broader base market,” it explained.
According to CBRE Philippines, the new trend in housing or accommodation is primarily accessibility.
“First homebuyers are now ready to forgo ownership of house and lots in the suburbs in exchange for short travel from home to work and any other necessities, e.g. school, shopping centers and tertiary hospitals. In addition, affordable condominiums now found in Metro Manila have made the idea of buying over renting a house a sound option,” CBRE Philippines said.
Affordable condo unit
It also pointed out that first-time homebuyers are also now open to buy an affordable condominium unit as their new home.
“Gone are the days that Filipinos find ‘condominium dwelling’ unacceptable. At present, home loan fixed rates has hit 5.75 percent, one-year fixed rate for repricing which makes payments affordable to as low as P10,000 monthly amortization depending on the project details,” CBRE Philippines added.
M PLACE is another mid-market condo suitable for the yuppies.
More Filipinos are also seeing the value and practicality of acquiring a condominium unit instead, given a shrinking urban space.
This scarcity of land in Metro Manila for housing development has even convinced the government to embrace the concept of affordable condominium development for the mid-market, as it has begun providing development loan facility to developers and cheap end-use loans to borrowers e.g. Pag-Ibig members, CBRE Philippines disclosed.
Buyers of affordable condominiums can now avail of long-term housing loans to purchase condominium units to as much as P2.5 million a unit with mortgage rates of 11 percent, free of value-added tax (VAT).
AVIDA Centera is an option for start-up families.
Given this increasing demand from the middle market and government support, property developers are now recognizing the market range for affordable condominiums for the urban dwellers.
“Thus, we expect more of these types of condominium project coming up for the broad mid-market class. Supply of this type of condominium will definitely outpace demand but not to cause a glut similar to the events of 1997,” CBRE Philippines said.
“Property developers are now wiser and will only break ground on their condominium projects upon getting at least 50-percent buyers commitment. Hence, we expect a growth of this product niche in the near future, particularly in Metro Manila and other key urban centers like Metro Cebu and Metro Davao,” it added.