THE proliferation of high-density vertical subdivision complex in Metro Manila in the last five years has changed the first-home preferences of newly formed households, according to property management and consulting firm CB Richard Ellis (CBRE) Philippines
Victor Asuncion, CBRE Executive Director for Research and Consultancy at CBRE Philippines, said the company is conducting a five-year study which started this year until 2016 to track approximately 135,000 condominium units for completion. About 31-percent of this stock is sold at a price range of P40,000 to P80,000 per square meter. These are predominantly studio and one -bedroom units with an average floor area of 30 to 40 square meters.
He said mid-market condominiums are relatively new to the market given that the earlier condominium projects come with bigger sizes and are sold at a higher price. Before mid-market condominiums became a big hit among property buyers, ownership is limited to the upper class given its restrictive acquisition cost. “However, the advent of mid-market condominium in the fringe of the business districts across Metro Manila has opened up a broader base market,” he said in his presentation during the recent year-end briefing of CBRE Philippines held in Makati City.
“The new trend in housing or accommodation is accessibility. First home buyers are now ready to forgo ownership of house and lots in the suburbs in exchange for short travel from home to work and any other necessities e.g. school, shopping centers and tertiary hospitals. In addition, affordable condominiums now found in Metro Manila have made the idea of buying over renting a house a sound option,” added Asuncion.
Unlike in previous cases when buying a condominium unit is not acceptable home investment for the mid-market, Asuncion pointed out that first-time buyers are now more open to acquiring an affordable condo unit as their new homes.
Home loan fixed rates has also reached 5.75 percent one-year fixed rate for repricing which makes payments affordable to as low as P10,000 monthly, depending on the project details.
In view of the scarcity of land in Metro Manila for housing development, Asuncion said even the government has embraced the concept of affordable condominium development for the mid-market by way of providing development loan facility to developers and cheap end-use loans to borrowers.
He said buyers of affordable condominiums can now avail of long-term housing loans to purchase condo units for as much as P2.5 million per unit with mortgage rates of 11 percent.
“Property developers are now recognizing the market range and debt of affordable condominiums for the urban dwellers. Thus, we expect more of these type of condominium project coming up for the broad mid-market class,” said Asuncion.
Asuncion said supply of affordable condominiums will definitely out-phase demand but will not cause a glut similar to the events of 1997. He said property developers have learned from their experiences and will only break ground on projects upon getting at least 50-percent commitment form buyers. “Hence, we expect a growth of this product niche in the near future particularly in Metro Manila and other key urban centers like Metro Cebu and Metro Davao,” said Asuncion.
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