While pandemic-induced disruptions have altered the Philippine economy and the property sector, the ongoing coronavirus vaccination programme is providing a glimmer of hope, and the government-projected economic recovery should also provide a much needed boost to local investor and end-user demand, according to real estate firm Colliers.

This year, Colliers expects a recovery in new condominium supply as developers are already exploring the viability of new project launches in key areas across Metro Manila. Improvements in launches and completions send a positive signal especially for a supply-driven condominium market, it said.

The real estate company recommends developers to further test demand in the luxury market and be more innovative with promotions and incentives.

Strategic landbanking within and outside Metro Manila is also crucial at this point, it said, adding that it sees stable demand for horizontal projects including house-and-lot, and lot-only units beyond the pandemic.

Projects in the luxury segment are the least affected during an economic slowdown, while joint venture (JV) projects between local and foreign firms are currently among the most expensive in the market, offering innovative facilities and amenities, it said. Despite higher prices, the average take-up in these projects hit 85 per cent as of end-2020, it added.

Colliers suggested that Philippine developers seize opportunities in the market by further exploring partnerships with foreign firms.

Given the potential demand, more luxury projects are expected to be launched, and these are likely to include JV developments, it said, recommending that developers further explore the viability of certain locations for JV and ultra-luxury projects, while also highlighting amenities, proximity to key infrastructure projects and attractive payment terms.

Over the past few years, the need to develop additional projects has compelled developers to consider fringe areas, it said.

Citing data from a Colliers survey in February, the real estate company said more than 70 per cent of the respondents plan to develop a property in Mandaluyong and the Alabang-Las Pinas areas in the next 12 months. These areas, it said, accounted for 21 per cent of total take-up for mid-income to luxury projects last year.

In the fourth quarter of last year, take-up in the pre-selling market fell by 53 per cent to 6,000 units, from the 12,900 units recorded in the same period in 2019, it said.

Given the decline in demand, developers have started offering promos to attract buyers, it said, adding that certain developers are also offering split or no down payments, lower reservation fees and free items such as appliances, furniture and gadgets.

Colliers opined that investors planning on buying should monitor discounts and promos in the secondary and pre-selling markets, suggesting that developers’ sales teams, meanwhile, be proactive in touching base with potential clients.

The real estate firm noted that remittances from overseas Filipino workers (OFWs) continue to drive demand for affordable to mid-income condominiums – valued at 1.7-5.99 million pesos ($35,500-125,000) – in Metro Manila. Developers will likely continue to cater to families that receive remittances from abroad, it said.

Colliers recommended that developers monitor the Covid-19 situation in countries that are major sources of remittances.

From January to February, the US, Saudi Arabia and Singapore accounted for about 50 per cent of total OFW remittances, it said, stressing that money OFWs send to their families should help sustain demand for residential units.

Several developers have been aggressive in mounting webinars to reach OFW clients, which is likely to be part of the new normal and will complement developers’ social media strategies, it added.

PHILIPPINE DAILY INQUIRER/ASIA NEWS NETWORK