Published on October 09, 2013, GMANewsOnline:
Written by Danessa O. Rivera
A popping bubble in property prices is far from happening at this point, because of a huge backlog and a strong demand from both office and residential sectors, industry experts said Wednesday.
“I don’t think we’ll run out of market for quality shelter in the next 20 years,” DMCI Holdings Inc. president Isidro Consunji said at the Philippine Real Estate Industry Forum organized by BDO Unibank Inc. and The Asset in Makati City.
“There are still a lot of shanties… The middle class is growing very much and the BPO (business process outsourcing) will accelerate,” he added.
A joint study of Subdivision and Housing Developers Association (SHDA) and the University of Asia & Pacific’s Center for Research and Communication on the the demand and supply situation from 2001 to 2011 showed a deep shortage in housing, particularly in the affordable, socialized housing, economic housing segments with a surplus in mid-cost and high-end segments.
However, the same study showed a 6.5-million unit backlog at the end of 2011, of which close to 3.9 million consisted of socialized, economic, low-cost housing units.
In particular, there is a strong demand from the premium and Grade B segments, Bangko Sentral Deputy Governor Diwa Guinigudo said.
“There is sufficient demand in the various types of housing industry… But according to the developers we talked to, the demand for mid- and high-end seems to be on the low side and they find a growing shortage in this area,” he said.
Colliers International defines economic housing as units that cost below P2 million, the affordable at P2 million to P3 million, the mid-cost at P3 million to P7-million and the high-end at P7 million and above.
History + affordability = stability
Century Properties Group Inc. chief finance officer Jose Carlo Antonio noted the demand for high-end housing was on the up since 2009. “One key factor is affordability, as down payments and flexible monthly amortizations have increased affordability,” he said.
“Metro Manila is very healthy, with the demand emanating from the continuous OFW remittances growth and the recent influx of foreign nationals,” he added.
Manuel B. Villar, founder of Vista Land and Lanscapes Inc. credited history in avoiding asset bubbles in the property sector.
“Now we have the benefit of hind-sight from the 1997 Asian Financial Crisis. It’s completely different… Southeast Asia is hot now, having far more stable condition,” he added.
In 1997, the Philippines had no significant BPO sector, OFW remittances and foreign reserves were very small, DMCI’s Consunji noted.
“There is a structural change in the Philippines right now,” he said, which is supporting the growth of the property sector.
For Bangko Sentral’s Guinigundo, macro-economic structural reforms and monitoring are keys to heading off conditions that destabilize financial markets.
“We have put in place ceilings to property loans, tighter monitoring of banks’ real estate exposure to prevent an asset bubble,” he added. – VS, GMA News