Property consultant Colliers International sees land values declining between 5 and 15 percent this year amid challenging business environment.
Joey Roi Bondoc, Colliers senior manager for research in the Philippines, said the projected decline is influenced by a projected 13.8 percent correction in condo price as developers slow down in their developments and marketing activities due to the new coronavirus disease 2019 (COVID-19).
Bondoc said the imposition of lockdown in the National Capital Region tightened supply with no new projects completed while sales were also restricted.
Bondoc said first-quarter takeup only amounted to 2,800 units, and some residential project completions were pushed back to 2023 and 2024.
Richard Raymundo, Colliers Philippines managing director, said residential developers have turned off the tap, resulting in limited supply, while extending sweeteners to deals like lower monthly payments, extended payment terms, and longer construction period.
Bondoc said developers have also offered 15 to 20 percent discount on pricing, loosened the rule on downpayment to 20 percent from the previous 30 percent, removed the reservation fees, and offered rebates on selected projects as well as free appliances for selected developers.
Colliers said vacancy in residential units is projected to be “more apparent” in the latter half of the year, with vacancy in many business centers in Manila rising for the fifth consecutive quarter.
Colliers said the unemployment scenario improve, coupled with monetary officials’ policies as well as improvements in overseas Filipino remittances, will determine the robustness of the condominium market in — rents, price and take up — in Metro Manila.
Colliers said supply of office supply fell 50 percent due to construction issues and manpower shortage.
New supply has reverted to levels when there were no Philippine offshore gaming operations yet, with annual supply seen to just hit 72,400 square meters (sq.m.) between 2020 and until 2024.
Colliers said it expects the decline in office space take-up to be “more apparent” in the second half of the year, resulting to vacancy hitting 5.3 percent this year compared to 4.3 percent in 2019.
Colliers noted that the first half of 2020, net take-up is already down 77 percent at 78,000 sqm only compared to 334,000 in 2019.