PROSPECTS for the real estate industry amid the Covid-19 pandemic are looking brighter for 2022, as the demand for luxury and mid-income residential projects indicate a gradual recovery.
According to the real estate analysts at Colliers International Philippines, residential projects in the luxury and mid-income segments are regarded as bright spots for the industry and developers are lining up projects to capture recovery.
They noted that one reason behind the resurgence in demand for residential sales is the accelerated pace of the government's vaccination rollout and the "subsequent reabsorption of office space," which would play an important role in the sectoral recovery.
The government's vaccine rollout and the subsequent reabsorption of office spaces is expected to help prop up residential demand.
"We also expect concessions and discounts, together with the 2-percent interest rate put in place by the Bangko Sentral ng Pilipinas (BSP) to help boost residential sales," the firm said in its research note titled "Jabs Key to Jumpstarting Property Recovery" published in May 2021.
"To further bolster demand growth, we recommend investors and buyers to take advantage of the attractive payment terms currently being offered in the market," it added.
The property research firm pointed out that while data indicated a reduction of demand for residential developments in 2021, this did not mean sales completely stopped amid the pandemic.
In Metro Manila, supply remains steady despite the delay in the completion of condominiums and the stock in the metropolis is at 140,000, particularly from the central business districts (CBDs).
Bonifacio Global City has the lion's share of the supply at 39,500, followed by the Bay Area at 28,700; Makati, 28,500; Ortigas Center, 18,700; Eastwood City, 9,600; Rockwell, 5,300; Alabang, 4,800; and Araneta Center, 4,500.
Developers were able to launch some 4,404 units in the pre-sales market in the first quarter of 2021, while take-up in the same period reached 5,358 units. New completion is expected to grow at 143 percent.
Of the first-quarter data, "mid-income-to-luxury projects continued to dominate, accounting for 97 percent of launches and 98 percent of take-up," Colliers noted.
"Higher-priced joint venture developments between local and foreign developers, which offer innovative facilities and amenities, is likely to help drive demand until the end of the year," it continued.
With a more discerning market on the horizon, property developers are faced with a challenge to be able to showcase its strengths in style and substance to appeal to investors willing to spend for design, aesthetics, and use.
In order to capture demand beyond 2021, Colliers gave recommendations to developers – introduce innovative payment schemes and other promotional gimmicks, monitor completions in submarkets with high vacancies, explore opportunities in fringe locations, upgrade amenities and highlight health and safety most especially during these times; and highlight the advantages of living in a CBD.
Shang Properties Inc. (SPI) took this into consideration in developing residential spaces by making it uniquely personal, a retreat from the hustle and bustle of the metropolis.
This is evident in Shang Residences at Wack Wack in Mandaluyong and The Rise Makati that are strategically located, giving residents access to CBD's and complete with all the essential amenities.
"We take great lengths to design spaces for our respective markets. At SPI, our goal has always been to provide an exemplary living space, curated carefully to reflect a unique personal touch," said Jose Juan Z. Jugo, SPI executive vice president for Commercial.