No glut in high-end residential market: CBRE

By Cathy Rose A. Garcia,

Posted at Jun 23 2012 08:36 AM | Updated as of Jun 23 2012 04:36 PM

MANILA, Philippines - Luxury residential condominium projects are popping up all over the metropolis, making some people wonder if there's too much supply.

But according to property consultant CBRE Philippines, there is no glut in the high-end residential market.

"In my opinion, a glut is where there's supply but no take-up... We don't see that slowing down anytime soon," Victor Asuncion, CBRE Philippines executive director for global research and consultancy, said in a recent briefing.

A view of Makati City's skyline / Courtesy of CBRE Philippines

Based on CBRE figures as of June 15, there are 143,123 upcoming residential condominium units in the next 8 years. Of the total amount, 27,351 units will be turned over this year, and 37,678 units in 2013.

"It's still location, location, location. There are some irrational developers who build anywhere and then complain that they don't sell and say there is a glut. You have to build where the market is and developers are positioning where the market is," Asuncion said.

More than two-thirds of the upcoming supply is located in Quezon City (24%), Makati (18%), Mandaluyong (15%) and Manila (12%).

CBRE sees the upcoming residential condo supply shifting to the price range of P80,000 to P100,000 (42.5%) and P40,000 to P80,000 (36.8%). The share of projects priced above P100,000 is going down.

More condos in provinces

CBRE also noted the rise of condominium developments in key provincial cities such as Iloilo, Cebu and Davao.

In Cebu, there is a strong demand for condominiums, with a take-up rate of 434 units a month. "Cebu is catering to the upscale market, mostly condos in Mactan and the central business district," Asuncion noted.

Asuncion noted that SM Development Corp., Ayala Land through Avida, Camelia Homes and Megaworld are all gearing for condominium developments in the provinces.