Rise of the North: Bulacan developers, investors on the look out for new, viable residential investments
Residential developers and investors are starting to notice the potential of Bulacan as the next major property investment destination. This can be partly attributed to its proximity to Metro Manila (just 20 kilometers north of the capital region) and to the big-ticket infrastructure projects, such as MRT-7 and the New Manila International Airport, that are likely to redefine the Bulacan residential landscape.
We thus recommend that developers continue with their landbanking initiatives especially outside of emerging business districts in Bulacan. Colliers believes that national players should engage in partnerships with local players that have a massive landbank.
Even beyond 2022, Colliers sees sustained residential demand, which should buoy the price appreciation potential of vertical and horizontal projects in the province.
Tap demand for integrated communities
In our view, COVID-19 has raised the need for investors and end-users to be in integrated communities. Colliers believes that integrated features will continue to anchor demand for residential projects, including unit owners’ access to essential goods and services and proximity to infrastructure projects.
Earlier, Megaworld announced that it will be developing Northwin Global City, a P98 billion township in Marilao and Bocaue, Bulacan. The township will host condominiums, office towers, malls, hotels and schools, and will offer accessibility as it is located near the Manila-Clark Railway project and the Bulacan International Airport.
Monitor progress of upcoming infrastructure
In our opinion, infrastructure projects in the pipeline such as the P740 billion Bulacan International Airport, MRT-7 and the North-South Commuter Railway Project, should stoke residential demand in the province. Developers should maximize the opportunities brought by these projects and align their plans for future developments as infrastructure has the potential to raise property prices and unlock land values.
Expanding market for condominiums
As of end 2021, Bulacan’s condominium stock grew by 129 percent to 2,231 units from the 973 units recorded in 2020. In our opinion, developers are likely to complete new projects on time due to sustained demand from overseas Filipino workers (OFWs) and investors. From 2022 to 2024, we see the delivery of about 1,130 units, higher than the 664 units completed from 2017 to 2019.
The bulk of the new supply from 2022 to 2025 will likely come from SMDC’s Joy Residences (multiple buildings) and 8990 Holdings’ Urban Deca Homes Marilao (multiple buildings). Other notable projects include Vista Land’s Storeys by Lessandra Building 1 in San Jose Del Monte, Bulacan.
Affordable segment leads residential take-up
In 2021, affordable projects (whose prices range from P1.7 million to P3.2 million) covered 65 percent of total horizontal take-up (house and lot packages), slightly higher than the segment’s share of about 62 percent in 2020.
Bulacan’s condominium market meanwhile saw a record high sale of 804 units in 2021. The affordable segment also led the take-up in the vertical market, accounting for 85 precent of total take-up from only 69 percent in 2020.
Colliers believes that the sustained demand for economic to affordable residential projects will continue to be driven by OFW remittances in the next 12 months.
Data from the Bangko Sentral ng Pilipinas (BSP) showed that OFW remittances reached a record-high of $31.4 billion in 2021, up 5.1 percent from the $30.1 billion recorded in 2020. BSP projects remittances to grow by 4 percent this year.
Increasing prices
In our opinion, the entry of national developers such as SM, Ayala Land and Megaworld, through the development of integrated communities, is likely to raise condominium prices in the province.
We expect condominium prices rising at an average of 5 percent a year in the next five years, and about 3 percent for house-and-lot projects. We project prices of vertical projects to grow at a faster pace than horizontal developments due to limited supply.
Colliers believes that take-up for residential projects in the province will continue to be buoyed by the pick-up in OFW deployment, the government’s COVID-19 vaccination program, timely delivery of infrastructure projects, and rebound in regional economic growth.
Property developers and investors are on the look out for more opportunities in Bulacan. With more active landbanking in the province, we should expect the launch of more exciting projects in the next 12 to 24 months.
