Colliers: Promos perk up middle-income property segment
The aggressive promos of developers to sell out their ready-for-occupancy (RFO) units paid off in the first nine months of the year, with the middle-income sector gaining ground and dominating demand.
Real estate broker Colliers Philippines on Wednesday reported the affordable to middle-income segments accounted for 94 percent of the total 9,000-unit residential condominium takeup in the January to September period in Metro Manila. These units are worth around P3.2 million to P12 million each.
“This only indicates that the RFO promos being offered by developers right now, which continue to abound, have really been doing wonders for the residential sector here in Metro Manila,” Colliers Philippines head of research Joey Bondoc said during their third quarter report briefing.
According to Colliers’ research, developers offered discounts of up to 60 percent for spot cash payment to push remaining inventory out.
At the same time, some developers are offering free parking slots with their condominium units, 36 months rent-to-own promos and furnished units for those who will pay a 5-percent down payment outright.
“That’s positive news for a lot of Filipinos because this is the segment that can be acquired by a mid-level employee,” Bondoc said. “And this should bode well for the Philippine property [sector], especially the condominium market in Metro Manila in general.”
As a result of this heightened demand, middle-income launches have also staged a comeback.
Demand improvement
In the first nine months, middle-income launches accounted for 64 percent of the total 11,000 new units, versus only 43 percent in the same period last year.
The share of launches in the luxury segment, or those worth at least P20 million per unit, shrunk to 9 percent from 20 percent previously.
Geographically, units in the Manila North, Fort Bonifacio Fringe, Manila South and Makati Fringe areas have seen the most demand improvement.
At the same time, however, Bondoc pointed out that developers may need to evaluate the sustainability of their RFO promos.
“How many anniversary discounts can you give out in a year? … Developers should be more creative and innovative with their RFO promos,” he said.
As of end-September remaining RFO inventory in Metro Manila was at 30,400 units, with the lower mid-income sector accounting for 35 percent.
Back outs have also declined, with those dropping their RFO purchases sliding by 26 percent to 2,700 units during the period.
