Developers advised to offer low to mid-market projects
Property developers were advised to take a good look at the market before launching new projects and focus more on the low-to-mid-market housing segment.
Julius Guevara, Colliers International Research and Advisory Services director, said low-to-mid-income workers still can’t afford to buy a housing unit.
“We have to realize that a big portion of that market still cannot qualify for financing and could not afford the units,” he said during the 2015 Cebu Housing Summit organized by the Subdivision and Housing Developers Association.
Guevara said developers should focus on making their projects more affordable.
He reiterated that the property market in Cebu, particularly the condominium segment, is softening. “There are about two years worth of unsold inventory in Cebu,” he said.
He cited their research which showed a slowdown in the launching of new condominium projects in Metro Manila and Cebu.
In Cebu, new condominium units launched this year went down to 2,200 units from 6,400 last year. Sales also declined to 2,100 units from 4,900 units last year. The Cebu market is expected to soften further next year, he said.
“The market has been slowing down because there is so much out there to choose from,” he added.
The market has been more stable for leisure-oriented and horizontal developments. Nevertheless, the number of units on the market continue to rise. Guevara said that based on the study done by Colliers, the inventory is expected to almost triple in the next 3 years. He said there are 12,000 units in the Cebu market in 2015. By 2018, this is predicted to increase to 33,000 units.
Guevara attributed the rapid developments to the accessibility of prime lots and wealthy Cebuanos who can easily start their own developments.
“There are a lot of local Cebuano developers who have their own brands that are well known and well entrenched,” he said.
“There is a big risk for Cebu to just increase the level of inventory because it’s easier for developers here. Market risk is high,” he added.
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