HAVING exceeded its reservation sales target for 2016 by an impressive P6 billion, developer DMCI Homes is anticipating even stronger growth in the condominium sector this year, the company’s head of sales said in a recent interview.
“We expect the residential real estate (vertical) business to continue to perform well,” DMCI Homes Senior Vice President of Sales Florante Ofrecio told The Manila Times. “We expect to continue our impressive performance in 2016 in terms of unit sales, driven by projects in proven and sought after locations such as Pasig, Mandaluyong and Quezon City.”
DMCI Homes launched six new residential projects in 2016, and hopes to launch “seven or eight” projects this year, Ofrecio said.
During the first quarter, the company has already launched two new residential projects, Prisma Residences in Pasig City and Mulberry Place in Taguig City. According to a statement released this week, other projects will be launched in the second and third quarters of the year in Mandaluyong, Makati, Pasig, Parañaque and Quezon City.
The company has set a target of P26 billion in reservation sales this year, after booking P29 billion last year, greatly exceeding its 2016 goal of P23 billion. In terms of unit sales, DMCI Homes saw an impressive increase of 55 percent from the previous year in 2016, recording 8,236 sales from 5,325 units in 2015.
Altogether, DMCI will offer about 15,300 units across its new projects, which it forecasts will produce P57 billion in sales by the time all are fully completed. For this year, DMCI has earmarked P8.4 billion for development and construction, another P3 billion for land acquisition, and about P600 million for improvements to existing properties.
DMCI does not see condominium demand cooling anytime soon, Ofrecio suggested. “In recent years, condo living has rapidly become mainstream,” he said. “While many Filipinos still aspire to own land and houses, the benefits (and) advantages associated with condos are just too difficult to ignore, especially in modern city living. In-city condos are good housing options, particularly because the alternatives are the much more expensive townhouses, or houses that are far from the city.”
The developer also sees demand coming from a number of different avenues. “The use of condos as halfway or workweek homes is an interesting and quite recent phenomenon,” Ofrecio said. “Investors looking to rent out or eventually sell the units will still continue to absorb a significant chunk of the supply.”
Although DMCI Homes has successfully gotten into the high-end condominium market with its Bay Area project, the Oak Harbor Residences under the DMCI Homes Exclusive—a company official, announcing the early start of construction of the third tower of the three-building complex, said recently that sales of units in the first two buildings had been “phenomenal”—it is still largely focusing on the middle segments of the market.
“Historically, the bulk of industry condo unit sales are under the affordable (about P2 million to P3 million per unit) and mid-income (P3 million to P5 million per unit) segments. These will continue to be the top performing segments,” Ofrecio explained. “Strong demand will still come from the new households created every year, and from those looking to upgrade or move to another location.”
Of course, DMCI Homes is not the only developer aware of the opportunities in the condominium sector, and the resulting competitive pressure is encouraging some to diversify.
“Due to hyper-competition in Metro Manila, developers are seeking growth in the other major and up and coming cities outside Manila,” Ofrecio observed. “We’re also seeing developers strengthening their office, retail, leisure and hotel businesses.” Whether in the residential sector or others, he added, “The ones that can offer the best overall value will corner the market.”
For now, DMCI Homes is not expecting a significant change in the market that would affect its outlook for this year, but is maintaining awareness. “As with other developers, we are always monitoring and anticipating market conditions, and things like interest rates, government policies, and cost of raw materials,” Ofrecio said.
“To ensure maximum market acceptability in a hyper-competitive environment, it is our objective to always offer housing options that are of superior overall value given the prevailing market and economic conditions.”