‘Residential buyers holding back’
THE RESIDENTIAL property sector saw a slight decline in total residential real estate loans (RRELs) in the first quarter of 2024, attributed to fewer project launches by developers and cautious buyer behavior due to interest rates and inflation, according to Leechiu Property Consultants.
“The overall decline in loans can be attributed to both developers introducing less projects and buyers holding back on purchases because of the interest rate situation and inflation, which have been elevated for some time already,” Leechiu Director of Research Roy Amado L. Golez, Jr. told BusinessWorld via an e-mailed statement over the weekend.
On July 11, Leechiu reported that the total granted RREL fell 9% to 9,064 for the first quarter of 2024 from 9,975 loans in the fourth quarter of 2023, citing Bangko Sentral ng Pilipinas data.
In the first quarter, single-detached houses accounted for 43% of the RRELs granted by housing type, followed by condominiums at 34.7%, townhouses at 22%, and duplexes at 0.3%.
Meanwhile, RRELs outside Metro Manila showed a 2% increase, while RRELs in Metro Manila went down 31%.
“For the growth of loans outside of Metro Manila, this shows the strength of the affordable and middle-income housing market,” he said.
Mr. Golez said townhouses and single-detached houses are products of affordable housing in projects outside of Metro Manila. The existing demand, especially in the Calabarzon region and Central Visayas, is due to jobs created by increased economic activity due to infrastructure development and industry.
“Cavite-Laguna Expressway (CALAX) will open a big part of northern and central Luzon to development. Right now, most of the projects that are being built by big developers or townships are hovering in Clark and Angeles City,” he said.
Condominium units saw the largest decline in granted RRELs, dropping 19%.
Mr. Golez said that in the short term, the share of condos will likely remain below average as inventory levels of condominiums are still elevated.
“But as new condominium launches start coming in because jobs created are still primarily in the Metro Manila area, this share will start to rise again.”
In the second quarter, the ready-for-occupancy units in Metro Manila totaled 578,000, with a 97% sales rate. Pre-selling units numbered 159,000, achieving a 69% sales rate.
Quezon City led in supply with 127,000 units, followed by Ortigas, Mandaluyong, and San Juan collectively offering 100,000 units. The Bay Area contributed 92,000 units to the market.
Manila added 83,000 units to the supply, while Makati and Taguig followed closely with 81,000 and 64,000 units, respectively.
Mr. Golez noted a 30% increase in condo project launches across Metro Manila to 3,530 units compared to the previous quarter, with new developments introduced in Alabang, Manila, and Quezon City.
Similarly, sales rose by 6.5% in the second quarter of this year.
Mr. Golez said he expects developers to continue to maintain a cautious stance regarding the introduction of new projects but hopes to see new projects in the second half of the year from the biggest developers. — A.R.A. Inosante