Condo demand picks up in Q3

But sustained growth still uncertain – Leechiu

MANILA, Philippines — Residential condominium take-up in Metro Manila posted robust growth during the third quarter, but real estate brokerage firm Leechiu Property Consultants Inc. (LPC) cautioned that the recent improvement should not yet be interpreted as a return to sustained growth.

LPC said Metro Manila’s residential condominium market take-up jumped by 17 percent to 8,454 units in the third quarter from the previous quarter as aggressive developer promotions and government housing initiatives supported buyers.

Unsold inventory eased to 80,000 units from a record 82,900 in the second quarter, and months of supply fell from 34 the previous quarter to 28, although the market still has a long way to go to reach manageable levels.

LPC said unsold units remain concentrated in the upper middle (P4 million to P7 million) and upscale (P7 million to P12 million) segments, which together hold about two-thirds of the stock.

While these indicators point to improving market conditions, LPC said demand still relies heavily on affordability-focused interventions, with much of this year’s improvement supported by deliberate efforts by developers and the government to bridge affordability and financing gaps.

Sharon Joy Roset-Saclolo, associate director and head of research at LPC, said developers and government programs are helping bridge affordability and financing gaps that have historically prevented some buyers from entering the market.

“While these efforts are supporting transactions and helping move inventory, we expect buyers to remain selective and focused on value, quality, financing flexibility and capital preservation.

Roset-Saclolo said the market’s challenge is whether current demand levels can be sustained as economic and geopolitical uncertainties continue to influence purchasing decisions.

LPC said near- to medium-term market conditions still face headwinds from affordability constraints, elevated inventory levels, compressed rental yields, inflationary pressures, financing costs and ongoing political uncertainty.

It said these factors continue to weigh on buyer confidence and could limit the sector’s ability to sustain recent demand levels.

As such, LPC remains cautious about whether performance can be maintained without continued support from developer incentives and housing finance initiatives.