Things are looking up for the residential property market as the Philippine economy prepares to rebound this year.
In a just released report, property consultant Colliers International said it expects the economic expansion to support demand in the residential sector, whether in the pre-selling or secondary markets.
According to associate director for research Joey Roi Bondoc, while they saw initial headwinds at the start of the year, especially the spread of the Omicron variant, the gradual return of foreign professionals and a turnaround in business and consumer confidence should help fuel the take-up of more residential units.
Bondoc said they see rents and prices recovering in the next 12 months and that these indicators bode well for the residential market.
In its report, Colliers said there were 8,731 units completed in 2021, up 159 percent from the 3,370 units in 2020, and all of the new supply came from the Bay Area and Fort Bonifacio. It expects the delivery of 6,500 units per year from 2022 to 2026, and for the Bay Area to continue dominating the residential market.
From a residential stock for Metro Manila of 142,190 units as of end-2021, Colliers projects a 16.8 percent increase to 166,140 units by end of 2024. The biggest increase is seen in the Bay Area at 45.3 percent to 43,970 units, followed by Alabang with a 30.5 percent increase to 6,370 units. Others with expected notable increases include Ortigas Center with 18.3 percent, Araneta Center with 13 percent, and Rockwell Center with 10.6 percent.
Colliers reported that vacancy in the Metro Manila secondary market reached 17.9 percent in the fourth quarter of 2021, which it expects to recede to 16.2 percent by the end of 2022, backed by the government-projected seven to nine percent economic recovery, a rebound in office leasing, and the return of expatriates to the Philippines with the easing of travel restrictions.
It noted that local professionals’ return to traditional offices should also raise demand for units in major business hubs and this should partly help improve vacancy.
It expects improvement in consumer and business confidence, citing data from the Bangko Sentral ng Pilipinas’ fourth quarter 2021 consumer expectation survey, which showed that the percentage of households planning to buy properties within the next 12 months improved to 4.2 percent from 3.6 percent a year ago, as well as BSP’s forecast that business outlook should continue improving to 68.6 percent in the next 12 months.
The report stated that OFW remittances will continue to be one of the primary residential demand drivers in the country.
However, Colliers noted that residential demand should also be supported by low interest rates, which should keep mortgage rates attractive to investors.
It recommended that developers should look at the viability of launching more horizontal projects in key provinces such as Pampanga, Bulacan, Tarlac, Cavite, Laguna and Batangas, as it observed a sustained take-up of horizontal units in these locations.
In the same report, Colliers said that rents and prices in the secondary market declined by 4.6 percent and 6.5 percent, respectively, as of end of 2021. But it expects rents and prices to increase by 1.7 percent and 1.5 percent in 2022 as take-up recovers.
The report further stated that recovery in the leasing market will partly depend on the government’s successful vaccination program, and urged more employers to welcome more of their employees onsite this year. The improvement in office space utilization, it said, should push up prices and rents back to their pre-COVID19 levels.
Colliers also observed that co-living will be a popular option among employers and their workers in Metro Manila beyond 2022, especially with the return of onsite operations and the metropolis’ traffic reverting to pre-pandemic levels.
It recommended that co-living operators upgrade their services to lure more tenants to their facilities, such as free housekeeping and laundry services, and stable internet connection and that they bundle flexible workspaces with free stay in a co-living facility. Supply of co-living units is expected to reach 5,890, with the Bay Area accounting for 3,000 units, the Makati central business district, 2,600 units, and Fort Bonifacio, 290 units.
WorldRemit teams up
Last year, WorldRemit, a leading global payments company, teamed up with rice retailer and franchisor Grainsmart to give its Filipino customers the chance to win a home business.
The three that won have shown their entrepreneurial spirit and managed their own businesses, learning how to manage stock, and engage with customers during the pandemic.
Grainsmart Pangkabuhayan package winner, Cleofe Kreutzmann, a Filipina living in Canada, offered her sister, Monneth, the opportunity to run the home business she won, in their hometown in Parañaque.
Monneth devised new and unconventional ways to secure new customers and maintain the business’ growth and momentum, such as offering rice loans to co-workers and neighbors. Meanwhile, Cleofe regularly sent money via WorldRemit from Canada to help keep the business afloat.
The Kruetzmanns hope to continue growing the store’s customer base and are considering strategic expansion in their region.
Other winners include Rosa Mae Mabale, a student and youth worker from Norway, and Analou Sua, a caregiver from Australia, whose families are planning on expanding the franchise business that they won by going into farming and opening a minimart.
“Our users go abroad to find better opportunities for their families. Understanding the sacrifices OFWs make, WorldRemit remains committed in supporting their journey towards an improved quality of life brought by financial stability,” WorldRemit country director Earl Melivo said.
WorldRemit currently sends from 50 countries to recipients in 130 countries, operating in more than 5,000 money transfer corridors worldwide and employing over 1,200 people globally.
On the sending side, WorldRemit is 100 percent digital (cashless), increasing convenience and enhancing security. For those receiving money, the company offers a wide range of options, including bank deposit, cash collection, mobile airtime top-up, and mobile money.
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The article was originally published in PhilStar Global and written by Mary Ann L. Reyes.
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