Emerging spots for new luxury, upscale developments
As I highlighted in my previous column, we are optimistic that the pent up demand for condominium units in Metro Manila will kick in once market conditions improve. The pace of recovery will rely on several factors, but we see economic indicators pointing to a glimmer of optimism.
For one, money sent by Filipinos working abroad reached $33 billion in 2020 despite lockdowns in host countries. For this year, the central bank is forecasting remittances to grow by 6 percent.
Aside from the government-projected increase in remittances, other potential recovery enablers include competitive mortgage rates; a potential rebound in office leasing in 2022; and a likely pick up in demand from local investors. Complementing these are the attractive payment terms offered by developers especially for their ready-for-occupancy (RFO) units.
Colliers Philippines expects a recovery in new residential supply in 2021, as developers are already exploring the viability of new project launches in key areas across Metro Manila and are preparing to tap pent up demand.
Stable take up for upscale, luxury units
The demand for upscale and luxury condominium units has been stable during the pandemic. Under these segments, condominium units are priced between P6 million and P20 million while the ultra-luxury projects are those priced upwards of P20 million a unit.
During my webinars, I emphasize the fact that previous crises have affected demand for residential projects in Metro Manila. But as historical data would show, the upscale and luxury condominium segments are among the more resilient sectors, exhibiting stability amid financial crises and showing signs of immediate recovery after a period of economic slowdown.
Over the past two years, the upscale and luxury segments accounted for 39 percent of the total pre-selling take up in Metro Manila, next to the mid-income segment which covered 44 percent of total demand.
Colliers Philippines data show that the upscale and luxury pre-selling projects in Metro Manila that are likely to be completed in the next six to 24 months have sold an estimated 86 percent of their inventory as of the third quarter.
Colliers Philippines thus recommends that developers monitor these price segments, as we expect demand to be driven by units from these price ranges beyond 2021.
The C5-Pasig City area is one of the emerging locations for more residential projects. We partly attribute the location’s attractiveness to the infrastructure projects likely to be completed within and around the area beyond 2021.
At Colliers, we have been highlighting the importance of public projects such as roads, subways and railways in raising land and property values across the country. One example is the Pasig-C5 area which stands to benefit, either directly or peripherally, from the completion of infrastructure projects.
Among these public projects is the MRT-4, a P59 billion railway project that will connect Metro Manila and Rizal. The 18.4 km rail line will have 13 stations starting from N. Domingo, Quezon City, to Taytay, Rizal. Construction is set to start in 2023 and is scheduled to be operational by 2025.
A P9.7 billion project and a 3.9 km extension of the existing LRT-2 system from Santolan, Pasig City, to Masinag, Antipolo, is the LRT-2 East extension. The project is expected to improve connectivity between Rizal and Metro Manila. Another project lined up by the government is the Pasig River Expressway (PAREx), a 19.4 km, six-lane expressway that will likely start from Radial Road 10 in Manila and end at the South East Metro Manila Expressway (C-6). This will also likely reduce travel time from Manila to Rizal to 15 minutes.
Businesses are now starting to reopen; the Philippine economy is likely to grow faster this year; while vaccination rate is improving. All these present a lot of growth opportunities in the residential market that both developers and investors are raring to capture.
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