Home sales in Mandaue, Lapu-Lapu seen to rise

CEBU, Philippines - Residential property take-ups in Mandaue City and Lapu-Lapu City are expected to rise over the medium-term given their status as emerging business hubs.

In the medium term, Colliers International sees more luxury and leisure condominium developments in Lapu-Lapu City while affordable projects are expected to proliferate in Mandaue City.

"The launch of more affordable condominium units will continue, albeit at a slower pace, as developers scramble to acquire cheap developable land," Colliers said in its research and forecast report on the residential sector penned by Joey Roi Bondoc, research manager. 

The real estate agency has observed the continued development of residential projects that cater to tourists such as condotels and serviced residences.

"We see a more robust development of leisure-related projects given the projected increase in tourist arrivals in the city that is attributed to Cebu being a jump-off point to Visayas and Mindanao destinations; the modernization of the Cebu Airport; and the city’s emergence as a key MICE destination outside of Metro Manila," Colliers explained.

Overall residential vacancy in Cebu City reached 25 percent last year, up from 20 percent a year ago.

The vacancy rate rose due to delivery of a significant number of new condominium units.

The demand for larger condominium (two- to three-bedroom units) in Cebu City is partly driven by foreigners residing in major business hubs like Cebu IT Park and Cebu Business Park.

Meanwhile, the take-up for studio and one-bedroom units is fueled by the demand from local and foreign investors, BPO employees, and affluent college students from the city and neighboring towns and provinces.

"Cebu City attracts a lot of students as it is the Central Visayas’ center for academic excellence," Colliers said.

In terms of completion, about 4,000 units were delivered as of third quarter I  2016, a 200 percent surge from 1,300 units completed in same period in 2015.

More than 80 percent of the completed units are located in Cebu City, while the rest are in Mandaue City (9 percent) and Lapu-Lapu City (4 percent), Colliers said.

Among the major projects completed during the period include Persimmon (632 units) by Aboitiz Land and Solinea (591 units) and Avida Towers (527 units) by Ayala Land.

About half of the projects completed fall under the affordable segment while a third are classified as mid-income. The luxury segment accounted for less than a tenth of all units delivered.

For the rest of 2016 about 4,000 units are expected to be delivered while an estimated 10,400 units or about 3,500 units annually are slated for completion over the next three years.

Due to continued development of residential projects in Mandaue, Lapu-Lapu, and Cebu City, house and lots have become more expensive resulting in a more aggressive development of affordable condominium units.

Take-up as of third quarter 2016 increased by a quarter to about 1,300 units from about 1,030 units in third quarter 2015.

More than half of the total take-up were from the Mid-Income category, followed by the Economic (20 percent) and the Affordable (16 percent) segments.

The stronger take-up is also attributed to robust international sales of recently-launched projects, including Taft Properties’ Mandani Bay Suites project.

 The favorable overall demand from locals is mainly attributed to increasing household incomes driven by OFW remittances. Other factors attributed to stronger take-up during the period are low interest rates; flexible and affordable payment schemes offered by banks and developers; improved accessibility to residential projects especially those inside township projects; and a generally robust macroeconomic environment. (FREEMAN)