Housing developments continue amid ‘plateauing’ market price

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In Photo: Ayala Land

THE housing backlog continues to influence developers with their residential projects despite the seemingly flat market price, based on Pinnacle Real Estate Market Insight report for the second quarter of 2017.

Vista residences

Citing data from Bangko Sentral ng Pilipinas (BSP), Pinnacle Real Estate Consulting Services, Inc. (Precsi) Director of Research and Consulting Jojo Salas said that the country’s residential property values slightly grew by 1.1 percent in the first three months of this year, from the same period in 2016.

The Residential Real Estate Price Index edged higher by 1.3, from 115.9 in the January-to-March period last year to 117.2 in the similar quarter in 2017.

Comparing it from the base level of “100” in the first three months of 2014, residential property prices grew by 17.2 percent.

Megaworld

“While the increase is substantial, the slight increase from the first quarter of 2016 means that prices are ‘plateauing’,” he said.

“Nonetheless, the big players are still building due to the huge housing backlog. Approximately, half of the 6 million with housing needs ‘can afford to buy’,” he added.

Pinnacle’s study estimates that the units of residential condominium projects in Metro Manila could aggregate to 240,000 by December 31.

It is noted that major player, SM Prime Holdings Inc., the pioneering homegrown company with P1 trillion in market capitalization, will launch residential units anywhere between 15,000 and 18,000 this year as regards its housing development.

The Ayala Land Group, with P100 billion worth of projects this year, has set the launch of Alveo brand’s P40 billion worth of housing inventory, consisting of 16 new projects.

Megaworld Corp, which comes third at P146.36 billion, will be developing a P30-billion 35.6-hectare township in San Fernando, Pampanga in the next 10 years, combining residential towers, office buildings, a mall, retail hubs, school, ampitheater and events venues.

Banking on stronger-than-expected market demand, Vista Land Group upgraded its target offering to the property market from P30 billion to P42 billion worth of real-estate projects this year, including P12-billion property developments in the first quarter.

“The top developers have been leveraging their sizes to achieve an economy of scale. While most of them would be offering attractive rents and prices for their products, one of their eyes would be watching on the quality of their offerings. Buyers and tenants will remember unpleasant turnover conditions. In addition, efficiency of operations and maintenance are, likewise, viewed highly by occupiers,” Salas noted.

Small and medium players, on the other hand, are waiting for the implementing rules and regulations to get a green light, as well as the price ceiling for vertical socialized projects.

The BSP, likewise, reported the total loans released by both universal and commercial banks to the property sector.

According to latest figures, a total of P1.31-trillion loans were extended to borrowers during the first quarter ending March 31, 2017. This represents an increase of 21.5 percent for the same period last year.

“Again, this substantial increase shows that there are more people buying, and they are being financed by the banks,” said the director of research and consulting of Precsi.

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Roderick L. Abad graduated from Pamantasan ng Lungsod ng Maynila, with a degree course in Bachelor of Arts in Mass Communication. He has 12 years of journalism experience, starting as a Special Features Writer in a major daily newspaper. In 2006, he moved to the BusinessMirror in the same capacity and, eventually, became a beat reporter. To his credit, he was a finalist in the 2011 Holcim Journalism Awards for Sustainable Construction and the 2013 Lasallian Scholarum Awards. He remains affiliated with the BusinessMirror as a contributor.