Published : Saturday, October 15, 2011 00:00 [ manilatimes.net ]
Written by : KRISTA ANGELA M. MONTEALEGRE REPORTER
HOUSING developers are maintaining “guarded optimism” in the next two years, given the possible effects of the economic troubles in Europe and the sluggish growth in the US and Japan, which are the Philippines’ top trading partners.
These overseas concerns may take their toll on the remittances of overseas Filipino workers, who account for a significant portion of the housing market.
“A lot of our OFW remittances come from those countries. We’re not really sure what will be the final effect of the crisis on remittance is, but a significant portion of our market is either directly bought or financed by OFWs,” Manuel Crisostomo, chairman of the Subdivision and Housing Developers Association Inc. said on the sidelines of the group’s conference.
The weakening of remittances may hit the affordable segment of the market, which offers units priced between P400,000 and P2 million, the industry executive said.
“The affordable housing segment is what is being bought by the OFWs and that’s where we offset our losses in socialized,” said Crisostomo.
The country’s housing backlog stands at 3.7 million units, half of which are in the socialized segment of the market where units are priced at P400,000 and below. The backlog is seen to rise to 5.8 million units by 2016 under the Philippine Development Plan.
Bulk of the backlog is in the National Capital Region because of migration from rural areas, said Jojo Salas, CB Richard Ellis Philippines executive director.
Calabarzon and Central Luzon—both highly urbanizing areas—follow Metro Manila in terms of the size of the housing backlog.
While bulk of the backlog is in the lower segment of the market, most developments cater to the middle income and only limited projects for the affordable segment.
Data from CBRE showed that about 140,000 residential condo units will be turned over this year, with 74 percent of the units already taken up. Residential condo supply is pegged at 36,441 units this year, but will go down to 6,616 units by 2016.
As the biggest and most populous city in Metro Manila, Quezon City has the highest number of condominium units in the pipeline.
“We have a strong local market to support development not only in vertical but horizontal as well,” said Salas.
He expects more players to enter the socialized, low-cost and affordable markets as other developers look to capitalize on this growing segment of the market.
Affordability, location, design and layout will be the trend in the mid-market segment, while high-end developments will move to more commercial locations.
“I think what’s important is to match the demand and of the products we will introduce. If it’s cheap, it doesn’t mean that the market will buy it. Price is not the only issue,” Salas said.
CBRE sees the emergence of vertical living outside Metro Manila, particularly in Cebu and Davao, which has six residential and two upcoming developments.
The government vowed that the housing industry will remain in the Investment Priorities Plan, entitling it to incentives, said Cristino Panlilio, Board of Investments managing head.