THE rise in local and foreign buying of real estate properties shows no signs of stopping.
Amid the slow-paced release of housing permits, property developers and marketers described 2018 as a busy year for the industry, especially for players who took advantage of the accelerated developments in house-and-lot and condominium developments.
Filinvest Land Inc. (FLI), which has condominium projects in the South Road Properties (SRP) in Cebu City, noted fast sales takeup for their Sanremo Oasis brand. Julie Castaños, FLI’s project development head for Visayas and North Mindanao, said the project logged a 119-percent increase in sales this year over the past year.
Sanremo currently has seven mid-rise towers with 1,096 units, of which 800 units were already delivered to unit owners.
“2018 was a good year for us,” said Castaños, adding that unit owners are enjoying high rental yields from both short and long-staying guests.
The robust developments going on around SRP have pushed up the value of projects in the area, luring buyers to speed up the acquisition of properties, whether for investment or end-use.
Mandani Bay, an integrated development located in the North Reclamation Area of Mandaue City, is another project that logged a healthy performance this year.
“2018 was magnificent,” said Gilbert Ang, general manager of Mandani Bay. “Although, we were a bit challenged at the start of the year, we were able to manage it.” Mandani Bay has obtained a Berde certification, making them the first to own one in Mandaue City. Berde stands for Building for Ecologically Responsible Design Excellence. It is awarded to projects that are “green verified” and to property developers that have devoted significant efforts to curb the effects of climate change.
Moreover, the team is waiting for President Rodrigo Duterte to sign their Philippine Economic Zone Authority (Peza) license for their first office building, which they will erect next year.
Listed developer Cebu Landmasters Inc. (CLI) remained bullish about its expansion plans in the Visayas and Mindanao. It expects to end the year with P5.3 billion in revenue and P1.7 billion in net income. Reservation sales, or sales from developments not yet under construction, are projected at P7 billion, with P4.6 billion or 65 percent of the goal already achieved in the first half of this year.
CLI booked a net profit of P826 million from January to June this year, from P633 million in the same period in 2017. Real estate sales went up by 45 percent to P2.585 billion. CLI said MesaVerte Residences in Cagayan de Oro City, Baseline Center in Cebu City, Casa Mira South in the City of Naga, Cebu, and Casa Mira Towers Labangon in Cebu City were the primary contributors to the company’s robust performance.
Property marketer Anthony Gerard Leuterio, founder of Filipino Homes and Leuterio Realty and Brokerage, said 2018 didn’t start on a good note for them, as developers faced a slow release of licenses to sell (LTS) and other permits from the Housing and Land Use Regulatory Board (HLURB).
“There were stalled projects because of the delays in the approval of some permits. Developers had to wait,” he said.
According to Leuterio, about 90 percent of the projects for 2018 were not unveiled to the market because some developers were not able to meet some of the requirements, particularly on socialized housing.
“Raw lots in the city are already expensive, and developers are having difficulty where to erect this kind of project. They also don’t want to take risks to build socialized housing in faraway places when the buyers of this type of project are working in the city,” he said.
“We want the government to at least relax their requirements so developers could build more, given the big demand in the market,” said Leuterio. “As a marketer, we now run out of projects to sell.” Available data from the HLURB 7 (as of September 2018) showed that the agency received 32 condominium projects for certificate of registration and license to sell (CR/LS) applications, of which only 23 projects were approved.
The approved projects translate to 1,133 condominium units worth P3.451 billion. This figure, however, is lower than last year, where the agency approved 39 projects or 3,829 condominium units worth P16.391 billion.
House-and-lot development applications for the same period stood at 31, of which 16 projects were approved, lower than last year’s 42 approved projects. The subdivision projects translate to 3,733 house-and-lot units and 365 lot-only units with a total value of P3.539 billion.
Leuterio described 2018 as “preparation time” for the big real estate explosion in 2019. He said those who were able to strengthen their land banking position since 2017 will reap better results next year.
Chinese buyers
Another highlight for this year was the entry of Chinese buyers purchasing multiple condominium units.
Leuterio said Chinese are not only strong in terms of tourism but also as real estate investors.
AppleOne Properties Inc. president Ray Go Manigsaca said they have many Chinese buyers purchasing units at their Sheraton Residences project in Mactan Island.
According to Manigsaca, the entry of Chinese buyers in real estate investments reflect the market’s optimism and confidence in the country’s economic growth in the long run.
“We booked higher sales this year, more than 10 percent from last year,” said Manigsaca. He attributed the positive performance of Sheraton’s strong brand, which helped them weather challenges such as the fluctuation of the peso against the dollar, which affected the cost of construction materials.
While Cebu is poised to reap benefits from the entry of Chinese investments, Leuterio warned that over-selling to this market may not be good for the industry, particularly for real estate.
“Relying on this market (because they buy more than one unit) is not a good market for us because they buy in speculation,” said Leuterio. He said that although the industry observed a rule not to sell a whole condominium building to a certain nationality, not regulating their purchases may make the project a ghost community.
Leuterio said the Chinese don’t stay in the Philippines and that they are more of flipper-type buyers. Flippers in real estate are those who buy units at the early stage and sell them when the project is done or when the value of the unit they bought has already appreciated.
In addition, the robust purchasing of Chinese buyers has resulted in price movements of real estate properties, making it difficult for the local buyers to purchase or meet the current price.
“It is not wrong to market properties to this market but we’d like to encourage developers not to concentrate only on this market,” said Leuterio, adding that it is a must for real estate developers to hold more sales missions abroad, particularly to key countries that have huge Filipino communities like the United States, Middle East, Hong Kong, Canada and Japan to attract real buyers.