CONDOMINIUM prices may drop between 15 and 20 percent as developers fight for lost market after the outbreak of the coronavirus disease (COVID-19), according to Januario Jesus Atencio, Januarius Holdings Inc. chairman.
Atencio, who retired as president of listed developer 8990 Holdings Inc., said the condominium segment is likely to be the most affected by the virus pandemic, while raw land and house and lot products will continue to be robust and in demand.
“What is going to be sensitive are condominiums. I wouldn’t be surprise if there is a 15 to 20 percent decrease in sale prices or sales volumes,” he said.
He added property developers would gear up to regain market share once the enhanced community quarantine aimed at preventing further spread of the deadly virus is lifted.
“Everybody is gearing up to get back market share. That is one of the things that we can expect when the lockdown lifts, not so much a race to profitability but a race towards getting market share,” Atencio said.
The public could expect developers to lavish buyers with discounts in order to capture bigger market share, he noted.
Atencio meanwhile said both corporate and individual borrowers could still not take advantage of the lowering of interest rates by the Bangko Sentral ng Pilipinas (BSP) aimed at softening the blow of the coronavirus pandemic on the Philippine economy, until activities in the economy get on track.
He noted that to cushion the impact of the pandemic, the BSP’s Monetary Board has cut interest rates by 125 basis points (bps) to an all-time low of 2.75 percent this year and has lowered the level of deposits banks are required to keep with the central bank by 200 bps to free up P200 billion for additional lending.
“In the Philippines, the BSP has made certain monetary policy moves so we just have to wait for the banks to act on it in terms of lowering interest rates. But the thing is we are in a lock down so even with low interest rates how can you spend money for your business when you are not going to work,” he said, adding there is a lag before the lower interest rates are felt.
Januarius Holdings recently pushed for the resumption of housing development projects through the creation of quarantined production units (QPUs) to ensure business continuity not only for the sector but also for the economy as a whole.
It said housing development projects would be recognized as QPUs and accredited by the Department of Human Settlements and Urban Development to build houses despite the ongoing quarantine.
Under the proposal, identified workers and staff contained in the QPUs would be provided with board and lodging and would not be allowed to depart the area. The area would not be accessible to persons not belonging to the QPUs.
“Any person, material or equipment from the outside community shall be thoroughly inspected, disinfected and sanitized before allowing entry into the quarantine production units,” Januarius Holdings said.
The company added social distancing among personnel as well as health and safety procedures of the Department of Health and the Department of Labor and Employment should be strictly followed.
“The QPUs shall be kept safe and COVID-19 free by applying social distancing and other personal and administrative health and safety procedures,” it said.
Januarius Holdings is a private asset management investment company founded in 2008 with diversified global investments in real estate, equities, securities, venture capital, retail and art.
