Like any saturated market, the condominium sales in many regions of the Philippines are not so robust, despite the real estate industry and builders saying differently.
Colliers International Research and Advisory Services presented information during the 2015 Cebu Housing Summit this past week showing that the number of condo-units launched in Cebu has declined significantly over the past year.
The research team also said that Manila has taken the hardest slump with a third drop in demand and building combined.
Colliers showed those in attendance at the Grand Convention Center in Cebu that 6,400 condo units were launched in 2014 in Cebu – those numbers have dropped to just 2,000 units in the first half of 2015.
The overall demand for condominiums in the Philippines has already ‘softened’ and many cities are packed with empty units and financed units without occupants.
Condominium units sold in 2014 in Cebu are said to have reached 5,000 units and expected to be less than 4,000 units or far less due to the decreased interest.
“The slowdown in the condominium market is apparent,” said a spokesperson for Collier.
“I highly suggest to developers to take a very good look at the market,” they added.
Colliers also noted that several projects in Manila have been delayed due to the phenomenon.
Many believe the market is weighed down by ‘buyers fatigue.’
Others believe the markets low interest rates over the last several years have investors looking for alternative assets to invest in – those who bought condos are waiting for their units to be built before buying other units, looking to live in them or lease them out to other clients.
“Condotels can attract more buyers than just pure residential condominiums,” Collier said.
Cebu’s overall hotel supply is 10,568 rooms at an average occupancy rate of 65 percent, Colliers noted.
Future issues will continue to plague the condominium industry, especially those in areas where developers will have to pay a premium for land rights to build township units and units with expansive landscapes.