UP UNTIL 10 years ago, there were no condominiums in Davao City.
The first to build one was DMC Urban Property Developers Inc. with its Ecoland 4000 project, a mid-rise residential complex with common amenities such as a swimming pool and is located just across the road from the first SM shopping mall in the city.
Nowadays, high-rise residential buildings, with units ranging from just under P2 million to as much as P80.8 million, have started to change the city’s urban landscape and more are under construction.
The country’s major property developers and homegrown firms are cashing in on the condominium-buying frenzy, which is in large part driven by the “investment” market — those who purchase with the intent of reselling once values go up or to rent out on short- and long-term contracts.
“There are those who buy in bulk, or a minimum of 10 units and then resell them when prices appreciate and there are those who buy and then rent it out in a traditional way or through other accommodation (systems),” said Engr. Leonora P. Gutierrez, Suntrust Properties Inc. assistant vice president for regional operations.
She estimates that this market segment comprise about 40% of their sales.
Ms. Gutierrez said the emergence of online booking applications like AirBnB has given condominium owners an option to sublet their units under daily or weekly rates apart from the traditional monthly or annual lease deals.
Suntrust is currently constructing a four-building condominium complex within parent company Megaworld Corp.’s 11-hectare township project in the northern part of the city, behind the second SM shopping mall.
Ms. Gutierrez said while such investment buyers are a boon from a sales point of view, developers have been prompted to come up with more strict mechanisms to ensure that transients do not compromise the safety and convenience of permanent residents.
“These buyers must abide by the regulation of the condominium, which is primarily security. That (security) is what we are selling to our clients, that when they buy units, they are secured,” said Ms. Gutierrez.
Resellers, meanwhile, pose a risk of muddling market prices, which could discourage future buyers.
Herbert M. Herrero, vice-president of Avida Land Inc., earlier said prices for their first condominium project launched in 2012 have already gone up by about 50%, but noted that this increase still corresponds to real market values.
Avida, the mid-range brand of Ayala Land, Inc., recently launched its second project in Davao City.
“We still feel (the new project) will have the same reception as did the first project,” said Mr. Herrero in an interview in August.
Ricardo F. Lagdameo, vice-president of homegrown Damosa Land Inc. (DLI), said that in their case, they are ensuring that they do not arbitrarily increase prices simply because of high demand.
“When we increase the prices of the units, we see to it that the increment corresponds to the market value,” Mr. Lagdameo told BusinessWorld.
He added that they have also made adjustments in the design of their six-building Seawind condominium project to meet market interest, particularly the inclusion of studio units that were not in the original plan.
“The market has started to demand for these units that in our present tower (the fourth building under construction), we have included studio units,” he said.
Mr. Lagdameo said the real estate sector is not worried about saturation at this point and believe that the market can still absorb Davao’s growing condominium inventory.
“We just need to be cautious,” he said. — Carmelito Q. Francisco