THE residential market remains the most competitive among the real estate segments in the country, according to local firm Pinnacle Real Estate Consulting Services, Inc., whose main business is to manage property assets.
“This segment of the real estate market is the most competitive at present, since a lot of players have been cashing in from this very profitable property sector,” Pinnacle said in its Market Insights report for December. “Whispers of property bubble are even pertaining to a smaller segment, the condominium market. But the country’s top real estate developers are not shying away from competition in the residential market.”
Pinnacle cited such property giants as the SM Group, which intends to sell an average of 20,000 condominium units yearly starting 2016, and the DMCI group, which had announced the launching of around 14,000 units next year.
Meanwhile, the Ayala Land Group and Ortigas & Co. are integrating residential projects into their mixed-use and township developments, Pinnacle noted.
The consulting firm said aside from targeting the Overseas Filipino Workers’ market, the residential property industry is also aiming at investors, who buy and rent out units.
“At this point, delivery of new residential condominium units is expected for the rest of 2015,” Pinnacle said. “Condominium buyers expecting rental income would like to see how their yields would flow in, especially if these purchases are leveraged with bank financing.”
Pinnacle said leasing of residential condominium units continues to be stable, with rents remaining “generally stable.”
Rents for luxury condominium units command the highest rate at around P300,000 per month for a 300-square meter unit.
Rents for two- and three-bedroom luxury units range from P120,000 to P250,000 a month, depending on the size, location, and furnishing.
For studio and one-bedroom units, the rates go from P15,000 to P30,000 a month, but can also reach P50,000, depending on the location, furnishing, and amenities of the condominium building.
“It would be worthwhile to monitor the rents of one-bedroom and studio units in the coming months, since this would spell the yields of the ‘investment units,’” Pinnacle said.
Pinnacle’s report mentioned a breakdown of the residential property market. Using data from the Housing and Land Use Regulatory Board (HLURB), it said the condominium segment accounted for 27 percent of the nine-year average of all licenses to sell issued by the housing agency.
Open market subdivisions and townhouses comprise 22 percent; economic housing, 27 percent; and socialized housing, 24 percent.
Pinnacle noted that of the around 800,000 yearly housing backlog estimated by the National Economic and Development Authority, around 400,000 households yearly can actually afford to buy houses. The rest are mainly from informal settlers.
“The private real estate developers typically target to carve a market share from this 400,000 per annum demand for housing all over the Philippines,” said Pinnacle.
It cited the Ayala Group, for instance, which has set its sight on low-cost housing under its Amaia brand, while its Bell Vita brand has been making inroads in the socialized housing segment.
““This is very timely, given the recent increase of the economic housing loan limit from P1.25 million to P1.7 million as approved by the Housing and Urban Development Coordinating Council,” Pinnacle said.