Property consultancy Colliers said the middle income to luxury segments of the property market will drive demand for pre-selling condominiums amid slower competition.
In a report, Colliers head of research Joey Bondoc said projects in these segments or those priced P3.2 million and above exhibited resilience in the first nine months of 2020 despite the pandemic.
Bondoc said the segments accounted for 89 percent of total launches during the period and covered 85 percent of total sales in the pre-selling market, up from 72 percent in the first nine months of 2019.
“Over the past two years, these segments accounted for 68 percent of the total pre-selling take up in Metro Manila. In our view, demand in the residential sector in 2021 will likely be driven by mid-income to luxury projects,” Bondoc said.
As of the third quarter last year, Colliers Philippines data showed that projects in these segments due to be completed from 2021 to 2022 have sold an estimated 86 percent of their inventory.
Bondoc said to tap pent up demand, developers should continue to offer flexible payment terms and adopt property technology (proptech) platforms. These include virtual reality (VR) tours and automated communication platforms for tenants and property management providers.
“Due to further construction delays, we project the delivery of 6,000 units in 2020, down 59 percent from our initial projection of 14,720 units. In 2021, we expect the completion of 7,270 new units, up 21 percent year-on-year,” he said.
Around 76 percent of the new supply during the period will likely come from the Bay Area followed by Fort Bonifacio, Alabang, Ortigas Center, and Makati central business district.
Colliers expects vacancy in the secondary market to decline to 13.5 percent by the end of 2021 from 15.3 percent in 2020.