MORE leisure-oriented condominium developments are expected to rise in Cebu in the medium term, mainly driven by its growing tourism sector, real estate services firm Colliers International Philippines said.
In a statement on Monday, Colliers said it has observed a steady increase in residential developments in Cebu that cater to tourists, such as condotels and serviced residences.
“We see a more robust development of leisure-related projects given the projected increase in tourist arrivals in the city,” Colliers said.
Colliers attributed the rise of leisure-related developments to a number of factors, such as Cebu being a jump-off point to the rest of the Visayas and to Mindanao destinations, and the modernization of the Cebu airport.
Also, Cebu City’s emergence as a key MICE (meetings, incentives, conferences, and exhibitions) destination outside Metro Manila is also driving demand for leisure-oriented condominiums, it said.
“Foreign and domestic arrivals in Cebu reached 3.3 million in 2015 and this is expected to grow by at least a tenth over the next five years,” Colliers said.
Based on the latest data from the Department of Tourism, Cebu welcomed 81,611 visitors through its international airport in September 2016. This accounts for 19.30 percent of the 417,061 tourists that entered the country through airports.
Colliers said it expects to see more leisure and luxury condominium developments in Cebu, particularly in Lapu-Lapu City in the medium term, while condominiums in the affordable segment are seen to rise in Mandaue City.
Stronger take-up of condo units
Meanwhile, it noted that the low-cost category or the economic segment dominated residential project launches in the Cebu property market in the third quarter of 2016, accounting for 60 percent of the new units launched in the quarter.
During the third quarter of 2016, residential condominium developers launched around 1,900 units, according to Colliers. This is a 50-percent decline from around 3,800 units in the same quarter of the previous year.
“The drop indicates that developers are holding back from introducing new projects due to oversupply concerns,” Colliers said.
In contrast, the take-up of units in the quarter slightly increased to 1,300 units from the 1,030 units absorbed by the Cebu market in the same period a year earlier.
“More than half of the total take-up [was]from the Mid-Income category, followed by the Economic (20 percent) and the Affordable (16 percent) segments,” Colliers said.
“The stronger take-up is also attributed to robust international sales of recently launched projects, including Taft Properties’ Mandani Bay Suites project,” it added.
Colliers attributed the strong market absorption to the increasing household incomes driven by overseas Filipino workers’ (OFW) remittances.
“Other factors attributed to stronger take-up during the period are low interest rates; flexible and affordable payment schemes offered by banks and developers; improved accessibility to residential projects especially those inside township projects; and a generally robust macroeconomic environment,” the real estate services firm said.