— PHILIPPINE STAR/MICHAEL VARCAS
By Beatriz Marie D. Cruz, Reporter
PROPERTY developers in the Philippine capital need to enhance their market research and consider lowering condominium prices to address the current “mismatch” between available units and buyer demand, according to property analysts.
“These overpriced condos aren’t matching with the existing buyers,” Anthony Gerard O. Leuterio, founder and chief executive officer of Filipino Homes, said in a phone interview.
“There are so many buyers, as in we’re talking millions of buyers, but the issue is they cannot afford [a condo in Metro Manila] anymore,” he said in mixed English and Filipino.
Unsold inventory in Metro Manila has reached 75,300 units as of the third quarter of 2024, according to property consultancy firm Colliers Philippines.
It could take around 5.8 years to fully sell all these units, about five times longer than in the pre-pandemic period, it said.
“The Metro Manila condominium market faces challenges right now, and developers really need to lower prices in the ready-for-occupancy (RFO) market,” Colliers Philippines Associate Director Joey Roi Bondoc said in an e-mail.
Of the 75,300 remaining inventory, 27,200 are RFO units valued at P154.5 billion, Colliers said in its latest report.
Latest data from the Bangko Sentral ng Pilipinas showed that condominium prices dropped by 9.4% year-on-year, reversing the 8.3% increase from last year and the 10.6% rise in the previous quarter.
“Property firms also need to start turning off the supply tap to limit completion and further exacerbate the oversupply issue,” Mr. Bondoc said.
Lovelle Althea Trisha Taleon, director for consultancy services at real estate firm Santos Knight Frank, attributed the buyer hesitancy to market saturation and high population density.
“Many prospective buyers now favor investing in properties outside Metro Manila, such as house-and-lot developments, which offer more space, privacy, and long-term value versus the accessibility of condominiums in CBDs (central business districts). The investment is there – there is just a shift in consumer preference,” Ms. Taleon said via Viber.
The oversupply is primarily in the mid-market segment, with much of its inventory dating to the pre-pandemic period, she added.
To address the supply-demand mismatch, Mr. Leuterio said that property developers need to thoroughly study the local market.
“[Property developers must] know what the market wants and focus on local [buyers],” he said, citing the need to market condominium units to local consumers, such as overseas Filipino workers (OFWs), instead of selling to the “temporary market” like foreigners and investors.
For Mr. Bondoc, developers must implement extended downpayment terms for pre-selling units and easy/affordable move-in fees for RFO units. They should also consider lowering the lump sum amount required before a buyer can move into an RFO.
Developers can also form leasing teams to help investors lease their condo units and aggressively promote RFO units to the OFW market, he added.
