Metro Manila’s condominium units oversupply is increasing.
Last October, Leechiu Property Consultants (LPC) reported that there was an oversupply of 29 months’ worth of condominium units in the metropolis. This, they said, was due mainly to high interest rates and external risks, along with a shift in buyer preferences.
This means that it would take 29 months for the current inventory of units to be sold at the prevailing sales pace.
LPC research and consultancy director Roy Golez Jr. noted a shift in preference toward single-detached homes and properties in nearby provinces, adding that changing buyer preferences and rising interest rates have slowed demand for residential condominiums in Metro Manila.
The report did not mention the exodus of POGOs and their workers, both of which used to purchase or lease many condo units in the metropolitan area, as a reason for the increasing oversupply.
According to one report, condo demand has hit the lowest level since the COVID-19 pandemic, stabilizing at 6,885 units sold in the third quarter of the year. New condominium launches also declined by 39 percent to 2,145 units during the said period.
The LPC report said there were 67,600 units across 510 actively selling buildings in Metro Manila, the highest since the pandemic. Quezon City had the biggest number of available units with 18,500, followed by Ortigas with 13,500, the Bay Area in Pasay with 10,500, Manila with 8,500 and Caloocan with 8,100.
Recently, new data from LPC showed that the oversupply of condo units has gone up to an equivalent of 34 months as of November.
Golez said that the latest level should have been close to net zero because there were 4,000 units in additional supply and 4,000 units sold, but there were 6,000 backouts since the 29 months’ worth of supply was recorded in the third quarter of the year. The same reasons were cited for the oversupply situation.
So far, condominium take-up was at 25,565 units, which is only 63 percent of the comparable period last year, while project launches stood at 13,226 or half of the previous year.
In a recent report by Tatler Asia, LPC founder David Leechiu pointed out that in recent years, especially after the pandemic, the desire for more open space and less congestion became a primary concern. This has led to an increased demand for residential open lots as well as house-and-lot packages.
He noted the emergence and popularity of projects on the outskirts of Metro Manila, adding that they have seen good price growth and a high take-up of these products located along major expressways or in areas with good access to highway infrastructure.
Leechiu sees this trend continuing, saying that these projects bring city conveniences outside congested city centers and allow residents to have a better quality of life while providing acceptable commute times to workplaces.
One important reason he cited for the shift in demand from condo units to house-and-lot packages, even in areas outside of Metro Manila, is strong transportation links and infrastructure.
Owning a condo unit has become a matter of necessity for many young families and individual urbanites who want to stay close to their workplace and who do not want to waste time traversing Metro Manila’s congested roads, especially EDSA.
The situation has now changed.
A friend of mine who lives in Quezon City said that all she has to do is book a Grab ride to the LRT-1 Fernando Poe Jr. Station, formerly Roosevelt Station, in Muñoz, EDSA. From there, she can travel to the Dr. Santos Station (Sucat, Parañaque), which is a short walk to her office.
Just last month, five new stations were added to LRT-1 after the Cavite extension project Phase 1 was inaugurated. These stations are the Redemptorist-Aseana Station, MIA Road Station, PITX Station, Ninoy Aquino Avenue Station and Dr. Santos (Sucat) Station. With the extension of the railway, commuters are now able to ride from North EDSA in Quezon City all the way to Sucat.
What usually took her more than an hour, if not two, to travel via EDSA is now reachable in a matter of minutes.
According to the Light Rail Transit Authority, they are looking forward to opening Phase 2 in Las Piñas and Phase 3 in Bacoor, Cavite.
So why buy or lease a condo unit near your workplace if you can save a lot of money from amortizing or paying rent by just taking the train? Commuting from north to south and vice-versa no longer entails a huge sacrifice.
Then there’s Skyway Stage 3 and NAIA Expressway, which are heaven-sent, especially during the December traffic. Now, I do not have to worry about not getting to another Christmas party on the other side of Metro Manila on time because of Skyway and NAIA-X.
And of course, those living in the north are looking forward to MRT Line 7 and the Metro Manila Subway project, which will provide even more alternatives to get to the south and vice-versa.
There’s also the North Luzon Expressway Harbor Link, which links NLEX to the Port of Manila to the west and Quezon City to the east.
Buying a house-and-lot package north of Metro Manila, especially in Bulacan, is no longer a bad idea even for someone working in the south.
Having fewer people living in condo units, especially in the central business districts, will help alleviate our parking and traffic woes.
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