Part 2 of 2
This is the conclusion of my piece on Cebu’s exciting residential landscape. What stands out is that more projects are due to be turned over in Cebu over the next few years. This should give Cebu investors and end-users more options.
Cebu condominium supply to grow by a fifth in 2026
Colliers recorded the completion of 10,500 new condominium units in Cebu in 2023. Among the notable completions during the year include Avida Land’s Avida Towers Riala, as well as Cebu Landmaster’s Mivela Garden Residences, Casa Mira Towers Guadalupe, and Casa Mira Towers Mandaue. Meanwhile, we also recorded the completion of Thyme Residences, the first condominium project in Minglanilla.
We see substantial completion across Metro Cebu from 2024 to 2025. By 2026, Colliers expects Cebu’s condominium stock to reach 93,100 units with the average annual completion of 5,000 new units from 2024 to 2026. Projects from national developers in the pipeline include Rockwell Land’s The Villas at Aruga, Megaworld’s Pearl Global Residences, 8990’s Urban Deca Homes Banilad (2 towers), and Arthaland’s Lucima. These projects, classified as affordable to luxury in terms of total contract price (TCP) per unit, are dispersed across Cebu Business Park, Mactan Newtown, Lapu-Lapu City, and Mandaue City.
Affordable to lower mid-income projects dominate
In 2023, Colliers recorded the take-up of 5,620 condominium units in Cebu, down 33% YOY. The affordable to lower mid-income projects (PHP2.5 million to PHP7 million), accounted for about 62% of total condominium units sold in the pre-selling market during the year.
In our view, the demand for these segments is partly sustained by investors who plan to rent out their units to outsourcing employees. The province cornered 83,800 sq metres (902,000 sq feet) of outsourcing office space deals or more than 50% of total transactions outside Metro Manila in 2023. These segments should also receive sustained demand from local investors as well as Filipinos working abroad looking for viable investment options.
The affordable to lower mid-income segments also dominated the take-up for house-and-lot (H&L) projects in Cebu, accounting for 55% of horizontal units sold in 2023. In our opinion, take-up for these units is also supported by remittance-receiving households, especially as Cebu is part of the Central Visayas region, one of the top sources of deployed overseas Filipino workers (OFWs) in 2022.
More pronounced product differentiation as demand recovers
Colliers encourages developers to assess the viability of launching more master-planned communities to take advantage of the government’s infrastructure projects.
Overall, we see Cebu reaping the benefits of a recovering property market. With the largest condominium stock outside of Metro Manila, Colliers believes that Cebu is well-prepared to capture demand post-Covid. Metro Cebu has options that cater to the demands of end-users and investors. The region also has diversified projects that serve the residential needs of young employees to the more discerning and astute investors. Colliers projects a recovery in residential demand beyond 2024. This should be supported by sustained regional economic growth, a stable inflow of remittances from Filipinos working abroad, and sustained BPO investment, with Cebu cornering more than half of office space deals closed outside of Metro Manila in 2023. Developers should further explore opportunities in the market but these strategies should revolve around the continued offering of attractive promos and flexible payment schemes as well as exploration of alternative locations for residential development, covering condominium, house and lot, and lot-only developments.
With more projects in the pipeline covering vertical and horizontal developments, Colliers believes that it is essential for Cebu developers to further differentiate to stand out in a fiercely competitive market and satisfy the demands of discerning and astute investors. Homegrown developers with sizable parcels of developable land should explore the viability of forming joint ventures with national and even foreign developers. We expect more projects that will incorporate green and sustainable features, more open spaces as well as upscale amenities. Developers should also test the upscale to luxury markets especially now that investors and end-users start to gravitate toward more expensive projects, especially given the Cebu market’s constantly rising affluence. Colliers data show that it’s not just the condominium projects that have constantly posted price increases; prices of House and Lot and Lot Only units have also increased across Cebu.
The Colliers Philippines team is looking forward to lining up more briefings in Cebu. It’s interesting to see what the future holds and the vast opportunities that national and homegrown players are planning to tap in Cebu in the years to come. I, myself, am excited for our next Cebu rendezvous!