CEBU, Philippines - As reports of a possible real estate bubble in the next few years brought jitters to the market, a Cebuano developer believes that this impression is mainly driven by fearful mindset as actual performance is showing otherwise.
Cebu Landmasters, Inc., (CLI) president Jose R. Soberano III said that the strong appetite of the real estate market due to the favorable interest rate sustains the real estate industry, and that the sector’s projection for a bubble is far from reality.
In fact, after spending billions of pesos for developing several real estate projects in Metro Cebu, both subdivision and mid-rise condominium projects, the company is again ready to pour in another P4 billion next year for four projects, mostly residential developments.
“The fear should be transformed into rational thinking that this is the right opportunity that the market should grab. For so long, the interest rate is at its lowest— it is within the reach of everybody across market segments,” said Soberano in an interview.
As a developer, he said he is defying the threat of a possible “real estate bubble” specifically in Cebu, saying “the market is so hot, I’m seizing the opportunity.”
Soberano’s company, which is known as the builder of economic to middle-range housing projects, has recently entered into the condominium development, including office building projects.
He said the appetite of the multiple and second-home buyers in Cebu is irresistible, and developers are encouraged to build more, while inventories of ongoing residential projects from middle-range to high-end can be easily disposed.
Aside from its existing condominium projects located in Baseline Complex in partnership with the Cañizares family, and the Asia Premier in Cebu Asia Town IT Park, a 12-story residential condo situated at A.S. Fortuna area in Mandaue City the Midori Residences, a six-tower development that will be constructed in Salinas Drive in Lahug, a chic subdivision for middle-income market in Minglanilla called Midori Plains a 7.6 hectare development to offer about 400 house and lot units, the company is again on its way to developing at least four projects in 2013.
According to Soberano CLI will start a subdivision project in Southern part of Cebu in the second quarter next year; a five-hectare residential village in northern part in Consolacion, a residential condominium towers in Salinas Drive, Lahug, and the expansion of its Baseline Complex condominium project in the uptown part of Cebu City, and a office-building project to be called Park Central at the Cebu IT Park.
Although, Soberano agreed with the economic experts saying there is a huge gap in the real estate market supply, leaving behind the need for economic and mid-range housing market, he believes that this part of the market can easily afford to buy or avail of the bank financing while financial resources is widely open and interest rates offers are fixed for long term credit packages.
Statistics showed that there are at least 3.5 million (and growing) household that need to own housing units in the Philippines. About five percent of them resides in Cebu or an estimate of 170 thousand households.
Soberano, a veteran Cebuano real estate expert, said that this market while they also avail of the financing plans of developers and banks, can also be a market for organizations’ whose expertise are in building low-end to economic housing projects, such as Habitat for Humanity, Gawad Kalinga, among others.
In fact, he said a growing number of developers are now entering into partnership with these organizations to comply with their requirements in providing a percentage of their projects to the low to economic housing target markets.
The gap in the supply and demand equation in the real estate sector, he said can be resolved, if proper planning of developers will be adopted, and market all across segments cannot be swayed by the impression or negative outlook for glut or real estate bubble.
CLI is a home-grown real estate development company in Cebu. After its incorporation in 2003, the company brought its passion for real estate to the countryside by developing its first residential subdivision, called San Jose Maria Village, in the town of Balamban, followed by similar projects established in Minglanilla, Toledo, and Talisay City. (FREEMAN)