By Komfie Manalo
Property management and financial services consultant Colliers Philippines said Tuesday that the local real estate market is correcting its prices, making it attractive for condominium and residential unit buyers.
Colliers' director for research Joey Bondoc said President Ferdinand Marcos Jr.'s policy statement in his third State of the Nation Address (SONA), banning Philippine offshore gaming operators (POGOs), would profoundly impact the property space.
"The total banning of POGO will only dampen the already slow takeups for residential units. It will also exacerbate the rising residential vacancy and slower growth in prices and lease rates," he said, adding that the vacancy rate could hit 19 percent with the total ban on POGOs.
He said that there had already been an exodus of POGO at the height of the coronavirus disease 2019 pandemic, even before the President's.
He added that around that time, the vacancy rate in the fourth quarter of 2021 was 17.9%. The current vacancy rate is 17%.
But Bondoc added that this condition has corrected the prices in Metro Manila's residential market.
During the surge of condominium takeups in 2019, attributed to the demand from POGO workers, Colliers Philippines data showed that the price per square meter increased by 10.9 percent quarter-on-quarter in the fourth quarter of 2019.
From a double-digit price increase in the residential market at the height of offshore gaming operations in the country, Bondoc said the POGO exodus has eased the price growth rate in
Metro Manila to around 2 to 3 percent over the next two years.
"It already corrected even the President made that directive. The lease rates are already recovering but in a corrected manner as we see rents to increase between 2 to 3 percent from 2024 to 2026," he added.
Supply and demand
Bondoc said developers delivered 11,300 residential units in NCR in 2023, close to the 11,700 units turned over in 2018 due to the surge in demand from POGO employees.
"Take note that these are projects launched at the height of the POGO demand in 2018," he said.
Bondoc said despite the POGO exodus, these new units are expected to be taken up by local investors, especially overseas Filipino workers.
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