DEVELOPERS in Cebu should brace for greater demand of mid-income condominium units to be driven by the strong purchasing power of Cebuanos.
“We’ve observed that the pre-selling market for condominiums is led by the mid-income priced units or those priced between P3.2 million and P6 million. We are pleasantly surprised that the take-up (for this segment) is the same in Manila and Cebu,” said Colliers International Philippines senior research manager Joey Roi Bondoc.
Bondoc said that in the past, it was the affordable condo segment (P1.7 million to P3.2 million) that is popular in the pre-selling market but because developers are scrambling to launch this type of projects in areas where land values are appreciating they are launching the more expensive segment which is the mid-market.
“The sweet spot for Cebu (real estate) is still the mid-income so developers should brace for greater demand in this segment,” Bondoc said, adding that with the improved purchasing power, buyers are “now becoming more discerning in terms of preferences.”
The similar take-up of mid-income condo units in Manila and Cebu also mean one thing—that Cebuanos’ purchasing power is catching up with that of Manila.
“Bulk of the condo unit sold in Iloilo and Bacolod were those priced between P1.7 million and P3.2 million. This only shows that the purchasing power in Cebu is strong,” he said.
Bondoc said this improved spending capacity is buoyed by the sustained growth of remittances, expansion of higher-value outsourcing companies and the increasing number of expats and foreign tourists in Cebu.
There are 42.1 thousand condominium inventory in Cebu as of the first quarter of 2019, of which 76 percent are located in Cebu City. By the end of 2021, Cebu province will have a total of 51.9 thousand condominium stock.
Mid-income condos make up bulk of the condo launches in the first quarter this year at 62 percent or 2,468 units followed by the affordable segment at 34 percent or 1,340 units and the luxury segment (P8 million and above) at five percent or 186 units.
Seventy-percent of the sold units in the same quarter were mid-income units followed by the affordable segment at 14 percent, luxury at four percent, economic (P450,000 to P1.7 million) and upscale (P6 million to P8 million) segments both at three percent. (KOC)