CEBU’s real estate industry is at the risk of facing a glut with the “oversupply” of residential projects, according to an industry official.
Colliers International research and advisory services director Julius Guevara raised this during the recently concluded Cebu Property Summit at the Radisson Blu Hotel. “It’s easier for a glut to develop here in Cebu because there’s a lot of participation, compared to Metro Manila where land (is mainly in the hands) of big developers or the government,” Guevara told local industry officials.
With property development being one of the most attractive investments today, Guevara said more affluent families in Cebu have expanded their business lines to real estate.
However, he advised small and new property players to conduct intensive market research before they decide to venture into real estate development.
“(They must do) proper market research to know what actually sells,” he said. The official also raised that future developers could consider developing office spaces, instead of residential projects like condominium.
While some industry players are at risk of the oversupply, Guevara noted that there are other developers that are careful of their investments.
“Oversupply is already felt, that’s why some developers have pushed back with their launches,” he said although not naming anyone in particular.
However, Housing and Land Use and Regulatory Board 7 and 8 Director Alixes Roy Lopez said that based on his recent consultations with homegrown and national developers alike, they said there remains to be a healthy demand for residential projects in Central Visayas, especially in Cebu.
“They will not continue to invest here if there is, in fact, an oversupply,” Lopez in a recent interview said.
In a document forwarded by Lopez, new condominium and subdivision projects that were issued licenses to sell in the first half of 2015 accounted to P11 billion worth in investments. This is equivalent to 2,090 housing and condominium units.
He said the number of projects might slow in the third or fourth quarter of this year as elections in May 2016 draw near. The official explained that investors normally halt some projects as they await for election results.
In terms of price points, properties in Cebu remain attractive to investors since land value is lower here compared to the top cities in Metro Manila, according to Lamudi Philippines founder and managing director Jacqueline van den Ende.
Lot prices in Cebu City, she said, is pegged at P43,696 per square meter, while in Mandaue City, lot price per square meter is at P39,481 and Lapu-Lapu City at P35,276. The prices are lower than the top cities in Metro Manila like Makati, Taguig and Mandaluyong, with lot prices per square meter ranging from P143,000 to P148,000.