We estimate that it will take more than five years for these unsold units to be absorbed by the Metro Manila market.
Colliers believes that the substantial amount of unsold RFO units is constricting developers to launch new condominium projects in the capital region. As of Q3 2024, Colliers data showed that unsold inventory in Metro Manila (covering pre-selling and ready for occupancy or RFO) reached 75,300 units.
It will take about 5.8 years to fully sell out all these unsold condominium units, about five times longer compared to the pre-pandemic period (2017 to 2019) where remaining inventory life (RIL) ranged between 0.9 and 1.1 years.
Of the 75,300 remaining inventory, 27,200 are ready-for-occupancy (RFO) valued at PHP154.4 billion (USD2.8 billion).
Colliers believes that there are opportunities in the residential market and these are the positives that developers should seriously consider.
Foreign developers. These partnerships should be beneficial to property firms with limited landbank as well as to those that intend to offer upscale to luxury and even ultra-luxury residential projects. As of end-Q3 2024, Colliers data showed that joint venture luxury projects in Metro Manila have take-up rates of between 40% and 100%.
Despite being the most expensive in the market, these projects are doing relatively well. We attribute this sustained take-up to an upscale and luxury market that remains awash with cash and continues to bank on condominium projects' capital appreciation potential.
HIGHLIGHT
CONDOMINIUM UNITS' PRICE APPRECIATION POTENTIAL
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