Realtors target young professionals

More than half of future residential units targeting young professionals

Dennis Estopace, Reporter

UNITS priced between P1.5 to P3 million will compose the residential condominium development in the Philippines in the next five years.

 

These units, according to a Jones Lang LaSalle Leechiu executive, are being built with an eye on young professionals not staying or opting not to stay anymore with their family.

 

"They are the younger generation who are now or would stay shorter with their parents," JLLL Associate Director Antonio Sabarre said.

They're now breaking tradition, he added.

Sabarre presented data from the property consulting firm that showed 55 percent of an estimated quarter of a million condominium units entering the market would have the "affordable" price range.

This price range composed only half of the 135,650 condominium units supplied to the real estate market during the period 1999-2012, a JLLL report said.

Christopher Fossick, managing director for JLLL's business in Singapore and Southeast Asia, said this is a demographic dividend that the property sector benefits from.

Image cropped from a report
by Jones Lang La Salle Leechiu.

And making prices affordable to as many people as possible is the correct path for the market, fossick said during a press briefing on Tuesday.

"The concern should not be the richest segment of the population who can afford the high-end properties whether prices rise."

Fossick added regulators should ensure that prices become affordable to a larger size of the population.

"If you can't do that, you'll have an asset bubble."

JLLL Philippines Inc. managing director David Leechiu said that the affordable price range share also comes from the increasing number of young Filipinos with a fatter purse today compared to a decade ago.

However, he says the demand doesn't only come from the traditional sources: remittances of overseas Filipino workers and business process outsourcing sector.

"Aside from foreign sources of demand, we're also seeing a domestic push."

Leechiu added that in the last 12 months, they are seeing increasing number of clients from the Philippines.

From the foreign front, what we're seeing are clients coming here who are homegrown Americans, for example, who see the 4- to 7-percent yield higher than that of Hong Kong's and Singapore's, according to Leechiu.

Nonetheless, the number of high-end condominium units priced between P6 million to P10 million would also see an increase in the supply share in the next five years at 9 percent of 149,000 total units.

The number of condominium units in this price range supplied between 1999-2012 only composed seven percent of the total.

 

Based on JLLL's data, the luxury condominium units, which are priced upwards of P10 million, would still compose three percent of the supply in the next five years as it was in the past 12 years.

The mid-range market, or those in the price range of P3 million to P6 million per condominium unit would drop to 33-percent share of the total supply between 2013-2018.

The JLLL data shows that majority of the supply in the low-end price range would be in the Ortigas-Pasig-Mandaluyong area (68%) and Quezon City (62%). The mid-range price range units (P3 to P6 million) would be in the Makati commercial and business district and its fringes (45%) while the high-end price range condominium units (P6 to P10 million) would be in the Bonifacio Global City.

This price range as well as luxury units wouldn't be seen in Quezon City.