YOUNG professionals and employees of offshore gaming companies are expected to continue fueling the robust demand for residential condominiums and dormitories this year.
Colliers International Joey Roi H. Bondoc, manager for research at Colliers, said that employees of Philippine offshore gaming operators (POGO) and local professionals who are working in the central business districts (CBD) are looking for more residential units in the fringe areas of CBDs like Makati, Ortigas, and Fort Bonifacio.
“Colliers believes that a mix of demand from offshore gaming employees and local professionals is helping sustain the Metro Manila residential market, partly driving demand for other segments such as dormitories that cater to professionals and students,” he told BusinessWorld via e-mail.
The worsening traffic in Metro Manila is pushing young professionals to look for living spaces near CBDs.
For 2019, Colliers is expecting more residential condominium units and dormitories to be launched to cater to this demand.
“We believe that the demand for worker dormitories remains underserved. The need is also rising due to the worsening traffic situation in Metro Manila,” Mr. Bondoc said.
“Over the next 12 months, Colliers expects a more aggressive launch of worker dormitory projects especially in the Manila Bay Area to cater to growing number of employees in the business district as well as employees from the Southern Luzon provinces of Cavite, Laguna, and Batangas looking for halfway houses,” he added.
As offshore gaming companies expand outside of Metro Manila, particularly in Cebu, Pampanga and Laguna, residential projects in those areas will likely benefit.
Meanwhile, the luxury condominium market shows no signs of slowing, with Colliers noting it has “attractive rental yields in the region; relatively low prices; and sustained demand from affluent Filipinos, foreign investors, and offshore gambling firms.”
“The luxury market in the country’s capital is relatively small but demand has been stable over the past few years. The projects being leased out or sold to the secondary market continue to receive strong demand… The pent-up demand encourages mid-income condominium developers to scale up and construct high-end projects in emerging business districts such as the Manila Bay Area,” Mr. Bondoc noted.
However, Colliers said rising interest rates could dampen demand, particularly from the mid-income market.
“Rising interest rates which could dampen low to mid-income residential demand over the next 12 to 24 months. We believe that a volatile interest rate environment should entice local developers to be more open to partnering with foreign firms to develop horizontal and vertical residential projects,” Mr. Bondoc said. — Vincent Mariel P. Galang