PROPERTY MARKET OUTLOOK. KMC Savills CEO Joe Curran (from left to right), COO Cha Carbonell, and Research and Consultancy Associate Director Joshua De Las Alas hold a press briefing in Taguig City on Wednesday (Feb. 21, 2024) to discuss the outlook on the country’s property market for 2024. KMC Savills is one of the country’s leading real estate brokerage and consultancy firms. (Photo by Leah Gonzales)
MANILA – Real estate brokerage and consultancy firm KMC Savills said on Wednesday that most middle-market consumers now opt to avail of housing loans from Pag-IBIG Fund to finance their dream homes outside Metro Manila.
"What we've seen is that because of the high interest rates, more and more mid-market middle class, working class people are leaning towards Pag-IBIG (Fund) to finance their homes," KMC Savills Research and Consultancy Associate Director Joshua De Las Alas said in a briefing.
Data from Pag-IBIG Fund showed that last year, the agency released a record-high of PHP126.04 billion in home loans to finance the housing units of 96,848 members.
The amount was higher by 7 percent compared to the PHP117.85 billion released in 2022.
"I guess one of the bigger factors really is the interest rates. Currently, a lot of working class individuals, they are very reluctant on taking up a loan because of the interest rates," he told the Philippine News Agency in a separate interview.
"Also, what we've seen is that some buyers [are] withdrawing from pursuing the condos [because] they realize upon turnover that the interest rates are high. What they realize is maybe it's more economical to just loan from Pag-IBIG because [the loan is] 30 years to pay and interest rates are lower," he added.
On top of rising interest rates, De Las Alas said the need to live near the place of work has declined, leading to the slowdown in mid-market condominium sales.
He said that in the Metro Manila alone, around 40,000 condominium units are still left unsold, half of which are from mid-market developments.
De Las Alas said that for the residential market, the resumption of face-to-face work arrangements and the possible cut in interest rates will boost demand.
"What we're seeing now is there are some industries that are realizing that working from home is not as efficient. There (are) security issues, connectivity issues so they're forcing people back and that's where the market's going to be for residential," he said.
De Las Alas said that while the effect of the possible cut in interest rates will not be felt immediately, it's a "first step to recovery" of demand.
Office, industrial market
KMC Savills, meanwhile, said it expects office market sector demand to be sustained in 2024, noting that an increase in vacancy rates is expected due to upcoming multiple-office building completions this year.
“Upcoming office completions are set to invigorate leasing activities," KMC Savills chief executive officer Joe Curran said.
Bonifacio Global City remains the favorable location for prime buildings, leading all submarkets with more than 2 million in office stock and an incoming office supply of about 182,000 square meters –the highest in all submarkets in Metro Manila for the past year.
In the industrial sector, KMC Savills chief operating officer Cha Carbonell said "manufacturing and logistics are paving the way for industrial hubs with manufacturing accounting for 41% of the current tenant market."
Laguna is reported as the primary location for over half of the warehouse stock. (PNA)
