Housing boom in Metro Cebu continues
Demand for condominium units is expected to continue to grow in Metro Cebu despite the decline in average housing prices nationwide during the second quarter of 2017.
Property management and research firm Colliers International Philippines expects take-up of horizontal and vertical developments to remain at a healthy level moving forward.
Joey Bondoc, research manager at Colliers, said they see a slight bias toward condominiums considering the business activity in Metro Cebu.
“We see demand for condominium units rising given that Cebu remains as a major business hub outside of Metro Manila,” Bondoc told Cebu Daily News.
Average housing prices across the country fell 4.6 percent year-on-year in the second quarter as the Bangko Sentral ng Pilipinas noted that real estate costs outside Metro Manila were declining.
BSP’s real estate price index
The BSP’s latest residential real estate price index (RREPI), which measures the average changes in prices of all types of housing units nationwide, dropped to 116.6 during the April-to-June period from 122.2 a year ago and 116.7 a quarter ago.
In a statement, the BSP said prices of condominium units and townhouses grew faster year-on-year at 5.1 percent and 2.9 percent compared to the previous quarter, respectively, while prices of single detached housing units declined by 9.9 percent during the period covered.
Condo unit prices in Metro Manila rose 5.2 percent in the second quarter even as stand-alone houses and townhouses saw prices going down by 6.1 percent and 0.9 percent, respectively.
Meanwhile, the BSP said that “the drop in prices of single-detached houses outweighed the increase in prices of condominium units and townhouses” in areas outside the NCR.
Prices of single detached or attached housing units outside Metro Manila dropped 10.3 percent year-on-year while those of condo units and townhouses increased by 5.5 percent and 7.1 percent, respectively.
“The increase in prices of condominium units can be attributed to the strong demand. As of the second quarter of 2017, the total take-up of condominiums outpaced the take-up for house and lots,” Bondoc said.
Why one buys a condo in Cebu City
Colliers has observed that owning a condominium in Cebu City, particularly, is becoming more popular to several factors such as the sustained flow of OFW remittances fueling end-user demand and Cebu being a significant contributor to the total number of Filipino workers deployed from Central Visayas.
Prime sites for horizontal residential projects within Cebu City are harder to obtain, resulting in the proliferation of affordable to mid-income condominium projects within the city, Bondoc said.
Furthermore, he said the continued expansion of BPO and KPO companies drives workers to stay close to areas of employment. Lastly, low interest rates make monthly amortizations more affordable.
The BSP noted that 75.3 percent of real estate loans recorded from April to June were for purchases of new houses.
Property loans, condo prices
According to the central bank, by type of housing, 45.3 percent of residential property loans were for the acquisition of single detached units, followed by condo units (44.8 percent) and townhouses (9.6 percent).
“What we’ve also observed is that overall average price of condominiums in the second quarter of 2017 grew by 3 percent compared to the same period in 2016. Lapu-Lapu (City) commands the highest per unit price because it is home to the most leisure-related projects,” Bondoc said, citing Colliers’ property report on housing prices during the second quarter of this year.
He said prices of condo units in the city of Lapu-Lapu grew by 7 percent while Cebu City was the second most expensive location for condominium units.
Mandaue, Lapu-Lapu prices
Based on the report, prices of horizontal developments were flat compared to the second quarter of 2016.
Notably, average prices in Cebu City during the second quarter of 2017 declined by 5 percent, partly reflecting the impact of competitively priced condominium units.
“Both Mandaue and Lapu-Lapu registered increases in the prices of house and lots by 2 percent and 4 percent, respectively, due to the increasing land values,” said Bondoc.
Given the growing demand for condominium projects in Metro Cebu, Bondoc said, they expect over 14,000 units to be completed between this year and 2020, which will further expand options for Cebuano end users and investors.
Single-detached houses
Christine Escalona-Sarmiento, president of the Philippines Association of Realtors Boards-Cebu Realtors Board (Pareb-Cereb), also agreed that single-detached houses in Cebu City have become less popular because these have become highly priced.
Sarmiento, in a separate interview, said it will be quite difficult for buyers to find single-detached housing units in the city, and, if they can, these will probably cost more than P15 million already.
Townhouses
“In the horizontal segment, what’s more popular now are townhouse and duplexes that are within subdivisions or villages farther from the center of the city,” she said.
Such is the case in Barangay Talamban, which some people would find already far, where houses that cost P5 million to P7 million within high-end subdivisions still sell fast.
In Banawa, for example, there are also houses that cost between P10 million and P15 million, but these are already old structures that need to be renovated.
There are also houses outside Cebu City but still within Metro Cebu that cost P7 million to P8 million and are definitely worth the price, she added.
Prices of condominium units in the Ayala area now range P170,000 to P180,000 per square meter which is not within the high-end bracket yet. High-end brands within the area cost P200,000 per square meter.
There are those outside Cebu City’s prime locations (Cebu Business Park and Cebu IT Park) that cost P1.7 million per unit and measure between 20 square meters and 24 square meters.
Some can get units for P1.2 million to P1.5 million, depending on the developer.
“Developers are bound to only keep increasing the prices of their properties to give justice to buyers who purchased units earlier. They cannot possibly make the price lower than how much they sold the units for during pre-selling period. It just keeps getting higher due to the growing demand,” Sarmiento said.
In Cebu City, the demand is still high for condominium units while the demand for house and lot properties are also increasing albeit only outside Cebu City.
Aside from high-rise condos and townhouses in the city, walk-up condominiums are also becoming more popular due to its affordability.
For horizontal developments, many developers are still looking for land in the city, but whatever they find will already be costly.
With plans to establish a mass transport system connecting the towns within Metro Cebu, developers are already inclined to bring their projects farther from Cebu City and have started land banking in places such as Minglanilla and Lapu-Lapu City.
Niña Sison, a digital marketing and social media specialist for a fabric company, said she would rather buy a condominium than a single-detached house because of market value appreciation, considering the booming real estate scene in Cebu.
Sison said she is also considering the central location of condo units, while single-detached homes in central Cebu are very few due to the influx of low-cost townhouses farther north and south.
“It is also easier to reevaluate resale value compared to homes, and there are all-in-one amenities like a pool and gym. It’s also low maintenance. I won’t have to pay for roof repair, or termites, or garden landscape maintenance. But the downside is the high association fees,” she added.
For Althea Ramos, an IELTS training specialist, she prefers a single-detached house because of its higher resale value and because it does not depreciate over time.
“I own the lot and can do whatever I want to do with it. I can pass it on to my next of kin,” Ramos said.
But at the end of the day, radio broadcaster Giovanni Pierro Malitao Jr. said whether one buys a condo unit or a single-detached house will all depend on their lifestyle.
“If you’re busy and you need to be near businesses establishments, then a condominium unit is perfect. But if you want to be at peace and have privacy for the family, then a detached home would do,” Malitao said.
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