Residential condo market likely to pick up this year

CEBU, Philippines —  Although demand for house and lot properties is still rising, Cebu will see a much active market for residential condominiums in the next 12 to 24 months.

A study conducted by Colliers International Philippines indicated that the trend provides more opportunities for developers to launch new residential projects in Cebu this year, to meet the increasing demand of people who are putting their money on residential properties.

Significantly, Colliers attributed this increase in preference for vertical projects to the increasing land values which have forced developers to focus more on vertical developments, and the proximity of condominiums to the CBD (central business districts) enhanced by the worsening traffic situation in Cebu, making them the choice of Cebuanos and investors alike.

House and lot developments in Cebu have also expanded outside of Metro Cebu, the study noted.

Some of the key horizontal projects launched in more recent years (2015 to 2017) are located in Talisay, Consolacion and Minglanilla, given the limited developable land within and near the city center.

“Generally, the residential market in Cebu is still strong. Sales of both horizontal and vertical developments are still at healthy levels. Colliers notes however, a shift in the market as condominiums have become slightly more viable given increasing land values in the city. In addition, the worsening traffic situation has forced individuals to look for residential options near the CBD. Upcoming supply is also sizeable which makes the market more competitive,” it added.

With this results, Colliers suggested that developers to build more residential developments in Cebu to add up to its existing portfolio.

Colliers recommends that more residential developments be built in areas traversing or nearby these infrastructure plans.

It also suggested that developers build more residential projects that are leisure and lifestyle-oriented in anticipation of increased interest brought about by the infrastructure improvements.

“Already, we have seen some developers incorporate the resort-type feel in their projects to differentiate their products. Ultimately, location and price will still be key,” Colliers advised.

Metro Cebu will still be the viable location for condominiums, with prices averaging the higher range of the mid-income segment.

House and lots meanwhile, have become viable in locations outside the city such as Talisay, Consolacion and Minglanilla, at a price-point of P3.2 million ($64,000).

“We encourage developers to further explore these areas for house and lot projects,” the study recommendation added.