RP residential mkt to perform well this year, says CBRE

MANILA, Philippines - Leading real estate services and advisory firm CB Richard Ellis (CBRE) Philippines said in a recent briefing that the residential market will remain upbeat in the 2012.

According to CBRE Philippines, a total of 259,380 residential condominium units have been launched from 2000 to 2011. With the exception of 2005 and 2009 when units launched dropped by 35% and 4%, total number of units launched on a yearly basis has been steadily increasing.  2011 alone show a 29% increase from 2010 with 57,979 units launched—reflecting the strong demand in the residential sector.

Developers are continuously expanding their portfolios with several announcing their plans to issue IPO’s and secondary offerings to be able to actively pursue residential projects. A total of 105,722 units are expected for turnover starting this year while at least 14,112 residential condominium units or no less than 743,438 square meters of saleable area estimated to enter the market in 2012.

This increase in numbers indicates developers’ confidence on the residential market, especially in the mid-income sector. Most of the upcoming supply in the residential market will cater to the middle-income segment.

While the high end market will remain in demand in 2012, developers will focus in developing more middle market condominium developments.  Developers agree that while there is a market for high-end condominiums selling at an average of P100,000 per square meters, the bigger market and greater opportunity is with the pent-up demand for affordable condominiums selling at a price range of P45,000 to P80,000 per square meter depending on the project location.

This niche market of affordable condominium developments is designed to cater to the broad middle-income market sector which mostly consists of young professionals and start-up families looking for their primary homes within Metro Manila, emerging urban centers such as Metro Cebu and Davao, and within the fringes of these business districts. More flexible payment schemes and better interest rates offered by banks will fuel uptake of this mid-income residential market.

Lui Matti, Executive Director for CBRE Asset Services Group shares that, “The shift from horizontal style housing to the more practical condo type development, with pricing now suited to a much wider range of buyers, shows the progress we are making towards becoming a more competitive economy. We are now getting more value out of each square meter of land, as well as lessening reliance on private transportation brought by developments in the residential market, much in the same way as Hong Kong and Singapore have done before us. We see 2012 as another buy year for shoppers, with a wide choice of projects each with unique amenities, and access to the right kind of financing.”  

For more information, visit www.cbre.com.ph or call +632.752.2580.