Residential developers urged to diversify geographically

MANILA, Philippines — Residential property developers are advised to set their sights on geographic diversification, given the stable take-up of units outside Metro Manila.

“While the Metro Manila pre-selling condominium market continues to see lengthened remaining inventory life, we are seeing stable residential take-up outside the capital region, particularly for horizontal projects,” Colliers Philippines said in its latest Market Intelligence report yesterday.

Data from Colliers showed that unsold inventory in Metro Manila (covering pre-selling and ready for occupancy or RFO) reached 75,300 units as of the third quarter.

“It will take about 5.8 years to fully sell out all these unsold condominium units, about five times longer compared to the pre-pandemic period (2017 to 2019) where remaining inventory life (RIL) ranged between 0.9 and 1.1 years,” Colliers said earlier.

Of the 75,300 remaining inventory, Colliers said 27,200 are ready-for-occupancy (RFO) valued at P154.4 billion.

In its outlook for 2025, Colliers said developers are likely to continue the shift to suburbia with lots-only and house-and-lot (H&L) projects outside of Metro Manila and in key areas outside NCR (AONCR).

“Horizontal projects remain attractive. We encourage developers to consider the viable locations for H&L and lot-only projects including provinces in CALABARZON, Central Luzon, Central Visayas, Western Visayas and Davao region,” Colliers said.

It added that H&L projects in these property hotspots recorded an average annual price increase of four percent to seven percent from 2016 to 2023.

“Lot only developments, meanwhile, recorded stronger price appreciation during the period, ranging between seven percent and 15 percent annually from 2016 to 2023,” Colliers said.

In line with its recommendation to diversify outside of the country’s capital, Colliers also urged residential developers to consider leisure-oriented properties.

“Developers should also cash in on the thriving demand for leisure-oriented properties including condotels, beachfront properties as well as golf communities. The demand for these projects should get a boost from the recovery of the country’s tourism sector,” Colliers said.

The professional services firm said earlier in its outlook for 2025 that the focus on leisure property projects is likely to continue.

“Focus on leisure property would continue but unlike the property cycle in the mid-1990’s, the development is more holistic, and masterplanned with various land uses,” Colliers said.

It sighted its own data showing that these projects were already popular pre-COVID-19 but the pandemic only highlighted the strong take-up for these leisure-centric residential enclaves.

Some of these leisure-oriented projects are dispersed across Batangas, Cavite and Cebu. Other locations likely to attract similar investments include Palawan, Boracay, Bohol and Davao.

“The demand for these projects should also get a boost from the recovery of the country’s travel and tourism sector. Colliers also sees the revival of demand for golf communities within and outside Metro Manila,” Colliers said.