Developers warned to be cautious on new launches

CEBU, Philippines — The heightened interest among property developers to launch new projects all over the Philippines to take advantage of the hyper-active market should be carefully evaluated against the prevailing headwinds and tailwinds in the property sector.

This according to experts at Colliers Philippines saying developers should remain cautious with their new residential launches due mainly to elevated mortgage rates.

After posting slower-than-expected growth during the previous quarter, Colliers believes that achieving the government-target economic growth of between six percent and seven percent in 2023 “will likely be a challenge.”

Thus, Colliers recommends that developers meticulously assess the sectors to prioritize, considering challenges and opportunities present in the property market.

Analysts are expecting the country’s Gross Domestic Product (GDP) to have expanded by 4.9 percent in the third quarter of 2023, up from 4.3 percent growth a quarter ago but slower than the 7.7 percent registered in the same period in  2022.

If realized, this would bring the nine-month 2023 economic growth to 5.2 percent, “still below the government’s full-year target of between six percent and seven percent.”

Analysts said that an increase in government spending, stable household consumption, and high demand for manufacturing likely drove expansion in the third quarter. However, the elevated inflation and the recent monetary tightening of the Bangko Sentral ng Pilipinas (BSP) are likely to result in slower economic growth for the remainder of the year.

Colliers Philippines mentioned the recent announcement of Cebu-based AppleOne Group to develop a JW Marriott Residences in Panglao Island, Bohol, saying like AppleOne, developers should further assess the viability of villas and resort-oriented projects outside of Metro Manila.

Results of Collier’s Residential Survey showed that about 23 percent of respondents plan to acquire a beachfront property for their next residential investments.

Demands for similar projects, such as the JW Marriott Residents in Panglao Island, will likely be driven by discerning and affluent investors.

The recovery of the tourism sector is also seen to further spur interest in more leisure-oriented properties.

AppleOne Group led by its president and chief executive officer (CEO) Ray Go Manigsaca signed an agreement with Marriott International for the development of JW Marriott Residences in Panglao Island, Bohol. The project will be located on a 7-hectare property with views of Maribojoc Bay. The condotel will feature 70 units ranging from one to two-bedroom units as well as villas. Private amenities include a pool and a lounge.

“Surviving the worst effects of the pandemic, people are now eager to make up for the lost time and travel, and we intend to bank on that. We want to entice them more by bringing the luxury experience to the regions starting with Bohol which we believe they will enjoy even more because of the experiences and tourist destinations,” Manigsaca said in an earlier interview. — (FREEMAN)