The low and middle-income segments will be hit the hardest in the residential market due to the rise in inflation, according to Leechiu Property Consultants (LPC).
Philip Anonuevo, LPC executive director for commercial leasing, rising oil prices means higher daily expenses for low and middle-income earners.
“We’ll be seeing weakening in the middle and lower segments of the market offset by the overseas Filipino workers (OFW) who might continue buying,” Anonuevo said.
He said with the peso devaluing against the dollar, now at 55.06, OFWs may have more money to make new payments.
Developers are also giving buyers the opportunity to lock in prices today, with expectations of lower inflation in the next three or four years. By that time, buyers would may have fully paid their properties.
LPC, however, said demand for residential units, particular for Roy Golez, LPC director for research and consultancy, said sales grew 54 percent between the first quarter and the second quarter of the year.
Demand for most segments posted significant growth as developers offered extended and flexible payment terms and investors purchased residential units to lock in current prices.
“The lower middle segment bucked the trend dropping by 89 percent as buyers opted to prioritize purchasing necessities over the security of owning a home. New launches likewise slowed down by 78 percent given uncertainties like increasing interest rates, inflation and construction materials procurement issues due to lockdowns in source countries,” he said.
Golez, however, said these did not make a dent on residential lot prices especially for Southern Mega Manila properties which have become more accessible through new expressways and other infrastructure.
“In these areas, lot prices have been steadily growing at 7 percent to 15 percent annually.
Among the biggest gainers have been properties at Rockwell South which launched in 2019 at P35,000 per square meters (sq.m.) and have since shot up by 52 percent to its current P53,1000 per sq.m. price,” he said.
LPC pegged the current condominium supply in Manila at 640,000 units and about 181,000 units in the pipeline. About 60,800 units are available for sale, equivalent to about seven months worth of sales based on the current sales takeup.
Golez noted said of the available inventory, about 11,000 or 2 percent are ready-for-occupancy units, and about 27 percent of the pipeline are in pre-selling units.
“While the numbers look quite high in the pipeline, about 73 percent of the pipeline supplies (have been) sold,” he said.
