The take-up in the pre-selling market of Metro Manila condominiums remain resilient despite the presence of inflation and the rise of benchmark yields in 2018. According to latest figures from Colliers International, 2018 pre-sales covering the major business districts in the city of Manila and the fringes extended to 54,000 units — surpassing the 53,000-unit mark it reached in 2017. A solid take-up for reasonably priced to mid-income units with prices ranging from P1.7 million to P5.9 million was also recorded.
Inflation in the country has relaxed since November of 2018 and the Bangko Sentral ng Pilipinas (BSP) is now forecasting inflation rates to range between two to four percent in 2019, lower than the annual rate of 5.2 percent in 2018. The raising benchmark yields by the central bank in the next 12 months is not much of a possibility due to the restrained inflation, withstanding the demand in affordable to mid-income residential sectors in the next 12 to 36 months.
Colliers is certain that given the strong end-user demand, pre-sales in 2019 will likely remain strong. Surpassing the 2018 sales figures could serve as a challenge however, given Colliers’ estimated deceleration in launches due to the shortage of available developable land in Metro Manila and the ongoing price hike of land in the country’s key business districts.
“Build, Build, Build” to spur growth in Quezon City and Ortigas Center
The groundbreaking of the Manila subway, the most expensive project approved by the government, is planned for Q1 of 2019. The completion of the first three stations in Quezon City — Mindanao Avenue, Tandang Sora, and North Avenue — is to be completed in 2022.
According to Colliers, Quezon City will most likely benefit the most from this project. Seven of the planned thirteen stations are to be constructed in Quezon City, along with the improvements in connectivity given the construction and development of the Metro Rail Transit-7 (MRT7) and the communal LRT-MRT station.
As Quezon City draws interest, it’s not impossible to see the propagation of more integrated communities, similar to that of the Ayala Land and Eton Properties. Given it’s interconnection with the other mass transport systems, the North Avenue station looks to be the one that is most suited for township.
The Quirino and Tandang Sora stations also provide residential options supporting the presence of offices in the North Avenue station. According to Colliers, the development of new residential towers in Ortigas is practical as new condominium units could complement the new office spaces that are to be developed from 2019 to 2021.
Colliers encourages developers who own parcels of land in Quezon City and Ortigas to explore the development of residential projects in said areas.
Aggressive development outside CBDs
Colliers believes that since there is a lack of developable land in the areas of major businesses such as Makati CBD and Fort Bonifacio, developers should consider fringe areas as sites of future residential developments. In the past twelve months, Colliers observed that 77 percent of the recently launched units were located in the areas of Quezon City, Manila, Caloocan-Malabon-Navotas (CAMANAVA), Ortigas fringes, Makati fringes, and Pasay-Paranaque areas while the remaining 23 percent were in the areas of major CBD’s.
According to Colliers, the residential projects in these areas continue to serve end-user demands of mid-income households that are upgrading to condominium living. With the scheduled completion of the Metro Rail Transit (MRT) 7 in the year 2021 and other projects, the area of northern Quezon City should attract households from as far as Bulacan while projects developed in Southern Metro Manila should attract families from Cavite and Laguna.