Mixed-use buildings sprouting in CBDs Residential market has more room for growth – CBRE

MANILA, Philippines - The Philippine residential market is expected to continue to grow in the coming quarters as demand for these developments remains stable, property consultancy services firm CBRE Philippines said.

According to CBRE Philippines, stable consumer confidence would boost sales of residential condominiums.

CBRE cited the consumer confidence survey done by the Bangko Sentral ng PIlipinas (BSP) which showed a healthy buying outlook for big-ticket items in the second quarter.  The consumer price index rose to 30.3 percent in April to June from 28.4 percent in the January to March period.

“Demand for residential houses remains stable as indicated by the results of a government survey. Buying intentions for real estate and motor vehicles for the next year has grown,” the CBRE said.

As a result, various developers are introducing new residential projects within the central business districts (CBDs) in Makati, Quezon City, and Ortigas to capitalize on the strong demand for these developments.

The CBRE noted in Makati alone, condominium projects showed strong performance, with absorption rate of 84.7 percent in its affordable to luxury projects while high-end projects represent 55 percent of the total bulk of supply in the area with 85.98 percent absorption rate. Mid-priced condominiums, meanwhile, had an absorption rate of 83.34 percent.

“Several existing and upcoming condo units continue to follow the trend of mixed-use residential building with retail podium and office space that can be utilized for BPO (business process outsourcing) services,” the CBRE said.

Meanwhile, Quezon City  has shown signs of improvement in the residential sector where projects are mostly mid-priced and smaller scale compared to other CBDs. Absorption rate is at 72.39 percent.

“Quezon City has seen significant investment into townhouse and condominium projects which are targeted in the city’s commercial areas where there is active market activity and ease of accessibility,” CBRE said.

Apart from this, the Ortigas area has become another potential market for investors and is expected to be an ideal ground for upcoming residential condominium projects.

Despite weakening markets particularly in China and Greece, CBRE remains bullish on the outlook for the residential sector.

“The country’s sound macroeconomic fundamentals and policies drafted by the central bank will enable the Philippines to withstand these shocks,” the CBRE said.