Condominium developers line up projects to capture market recovery
Colliers Philippines expects recovery in residential demand to rely on a projected rebound in office leasing, macroeconomic recovery, sustained remittances from overseas Filipino workers, competitive mortgage rates, attractive and flexible payment schemes, and a pick up in business and consumer sentiment. An accelerated vaccination program should support these factors and encourage more businesses to reopen and expand.
In our view, the projected pick up in residential completion in 2021 partly indicates a rebound of the secondary residential market in Metro Manila. Colliers believes that an aggressive delivery of new condominium units is crucial especially for a supply-driven market like Metro Manila. This should benefit both major business hubs and fringe areas.
Aside from lining up launches to maximize pent up demand, developers should be aggressive in utilizing online platforms and improving amenities to cater to discerning preferences.
Colliers expects the completion of 10,061 new units in 2021, up 200 percent from the 3,370 condo units completed in 2020. We anticipate the delivery of about 7,500 units per year from 2021 to 2025.
Much needed boost
Colliers expects take-up to gradually pick up due to our projected recovery in office leasing complemented by other enablers. Cash remittances from OFWs grew 6.3 percent to $12.3 billion from January to May 2021. Remittances are among the primary drivers of residential demand, particularly in the affordable to mid-income price segments.
We also see the ramped up vaccination program buoying demand as this is likely to spur an accelerated reopening of businesses and absorption of office space. This should contribute to a recovery of investor sentiment as the government aims to achieve herd immunity by the first quarter of 2022 which should inject a much needed boost to the residential sector.
Sweetening the pot
To lift demand in the pre-selling market, some developers are offering discounts and promos. Aside from attractive payment schemes, developers are also sweetening their marketing strategies by offering freebies like appliances and gift certificates.
We continue to see an uptick in the demand of affordable to mid-income properties near transport hubs. Innovative payment schemes and proximity to infrastructure projects are luring buyers and investors to acquire residential units in the fringes of major business districts.
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