If you’re in Metro Manila, you would have to be blind not to see the numerous high-rise residential condominiums being constructed. From a little more than 7,000 condominium units completed at the beginning of the millennium, the number of condominium units in Metro Manila jumped to roughly 90,000 by end-2011. The annual new supply of condominium units started growing sharply around 2005. From then until 2011, supply growth has averaged more than 30% annually.
However, we don’t think that the current growth spurt is over yet. From 2012 to 2016, more than 200 residential condominium projects are expected to be constructed, which will produce approximately 120,000 housing units. This means that an average of 24,000 units is scheduled for completion each year for the next five years. Despite this massive volume of incoming residential supply in Metro Manila, developers have remained optimistic and some have plans to launch even more residential projects. Thus, the forecast supply of 120,000 residential units may go even higher in the coming months.
Note: Mid-end condominium units generally have selling prices ranging from PHP 1.5 million to PHP 10 million, while high-end condominiums typically have prices above PHP 10 million.
Source: Jones Lang LaSalle Leechiu Research & Consulting
With the large number of condominium developments in Metro Manila, competition among developers, as a result, has become more intense. In order to attract buyers, developers have employed several measures including adding unique features or using international brands in the projects. Unique features may include incorporating “green” technology into the development. Meanwhile, international branding of residential projects has somewhat become a trend in recent years. For one, the Shangri-La Hotels brand entered the residential condominium scene with its first development, Shang Grand Tower, in Makati CBD back in 2006. Now, there are two existing Shangri-La branded condominiums, with three more on the way. Other upcoming international branded condominiums include the Raffles Residences, the Trump Tower Manila, and the planned Grand Hyatt residential tower.
Other measures used by residential developers to secure buyers include offering discounts and more flexible payment schemes. Currently, discounts usually range from around 2% to 10% depending on the buyer’s payment scheme, but can go as high as 20%. Some developers even offer discounts of up to 40% of the total selling price. As well as discounts, payment schemes can be a major deciding factor for buyers. Previously, downpayments on condominium purchases ranged from 20%-30%, however, now downpayments range from 10%-20%, with some developers offering no downpayment schemes. These are just a few of the new trends spreading through the market right now.
The residential condominium landscape in Metro Manila has changed significantly in the last ten years. The residential condominium supply has grown tremendously in the past decade and is expected to more than double in the next five years. Condominiums have become more affordable to the middle-income market and competition among developers has increased. But the change in the landscape is not over yet, as the residential condominium market in Metro Manila continues to evolve further.
About the author
Jessica Mae Go is a Senior Research Analyst for Jones Lang LaSalle in Philippines, based in Manila.