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Housing Market in Metro Manila
AREA Press Release No. 38/2009: September 28, 2009

Dr.Sopon Pornchokchai, Ph.D. Dip.FIABCI, MRICS
President, Agency for Real Estate Affairs (AREA)

Agency for Real Estate Affairs (AREA) went to conduct a comprehensive housing survey in Metro Manila and its President, Dr.Sopon Pornchokchai, was recently invited to the Subdivision and Housing Developers’ Association of the Philippines to present the findings in Manila. The following are some major findings presented.


1. Our Survey
AREA conducted a survey of 134 housing projects at their sales offices and the project sites to examine the sales situation and to assess the overall market situation during April, 2009.  The location of all the projects visited were also plotted in order to build a thorough database for future development of the Metro Manila real estate information centre.

The following are maps of the projects, including the locations of all the project surveyed and another map of a group of projects in the Zone of Makati in particular.  For an interactive GIS map from Google Earth, one can observe it at http://www.area.co.th/mapsresearch/index.php.

2. Preliminary Findings
On the whole, there were 134 housing projects covered in this survey at the end of April, 2009, consisting of 100,102 units with a total value of 294 billion pesos or 6.204 billion US dollars. On average, a housing unit in Metro Manila was priced at 2.937 million pesos.  This was the cheapest compared to house prices in Ho Chi Minh City, Bangkok, Phnom Penh and Jakarta, valued at 7.823, 4.722, 4.308 and 3.749 million pesos per unit, respectively. On the one hand, this implies a potential attraction for investment; on the other, this also implies the current weakening economy of the Philippines compared to other economies.

Some 53,137 units were still available for sale during the period of the survey. Many projects were offered for sale on a pre-sale basis without any completion. This might be a sensitive point for both buyers and investors. If an economic crisis appeared, construction might not be completed on schedule. This may cause difficulties for developers, contractors, financiers, consumers and other beneficiaries at large.

In further detail, most of the 100,102 units were condominiums: 78,582 units (79%). The second and third largest groups were detached houses at 13%, and duplexes at 6%. That condominiums prevailed was a common phenomenon throughout the ASEAN Region because of the massive intensified development within the city centres, where infrastructure was better provided. It should be mentioned that most of the housing and condominium units were priced below 2.5 million pesos, and some 28% were priced less than 1.4 million pesos.  On average, approximately 6% of the units were sold every month. This is quite a slow rate reflecting the slow-down of the economy.

3. Situation by Location
In this analysis, there were ten zones grouped by the clustering of housing projects. This information would be beneficial for the financiers, developers and buyers involved in each location.

Location 1: Makati: There were only 13,672 condominium units or 14% of the total supplies in 22 projects. Their value was 52.6 billion pesos, which was the third largest of the 10 locations. The average unit price was 3.847 million pesos, which is higher than the overall average. The situation was very good. Only 36% still remained for sale.

Location 2: Manila: Of the 12,677 units (13% of the total supplies), most were condominium units. Only 202 were townhouses.  Some 54% were sold. The average prices were significantly lower than those in Makati, namely, 2.35 million pesos.  This location was classified as less-privileged compared to Makati.

Location 3: San Juan: There were some 14 projects, with the largest number of units at 26,155, or 26% of the total units.  However, only 18% were sold. This was a warning for this area. The total value of the development was 50.8 billion pesos, which was the second in priority. The characteristic of this area was the low-income housing in the form of condominiums.

Location 4: Pateros: In this location, the average price was the highest, at 4.961 million pesos. This was an area of high-priced and medium-priced condominiums. A unit was on average 4.961 million pesos. Around half of them were sold. There should be no problem with the sale of these luxury units in this location.

Location 5: Valenzuela: This location consisted of 8 projects surveyed. However, there were only 2,543 units or only 3% of the total, making for the smallest location. Some 59% of the units were low-priced condominiums, whereas 27% were medium-priced detached houses. The rest were low-priced townhouses.

Location 6: Quezon City: Housing units in this area were on average the cheapest at the price of 1.889 million pesos per unit. In particular, the average price of a condominium unit was worth 1.502 million pesos. Apart from low-priced condominiums, which were the majority, there were also medium-priced townhouses and detached houses, with a few shophouses.

Location 7: Quezon City North:  In this area, which was further away from Quezon City, an average price of a condominium unit was as low-priced as 1.078 million pesos. However, 75% of the total 6,486 units were medium-priced detached houses, at 2.691 million pesos. Thus, for those who wanted to have a low-rise, medium-priced detached house, this was a preferred location.

Location 8: Pasig-Cainta: There were only 5 projects currently offered for sale in this location. All of them were condominium units at different prices. The average prices were 1.943 million pesos. It should be mentioned that only 39% of the units were still available for sale.

Location 9: Pasay: Of the total 9,984 units in 10 projects surveyed in this location, only 29% (2,940 units) were still for sale.  This means that the sales situation was quite good in this location. Products were predominantly condominiums at different prices.

Location 10: Southern Suburbs: The number of projects in this location was the largest of 30, constituting 16,356 units, of which 61% were sold. In this area, the total value of the development was the highest at 67.27 billion pesos.  Forty-four percent, which was the largest proportion of the units, were detached houses priced at 6.53 million pesos.

4. Concluding Remarks
On the whole, the housing market situation was somewhat acceptable. There were only some locations where the sales were slow. The number of projects which could not be developed further and were cancelled was insignificant.  There should be no major crisis in the housing market in the near future. However, close monitoring of the market performance is a must for proper planning of both the public and private sectors.

According to our survey, the housing provision by the private sector in Metro Manila was a substantial contribution to the efficient housing of the people in the city. Enabling policy to assist the private sector in helping to house the people should be encouraged, even in the case of low-priced housing for lower-income groups.

Makati, 2009                                                                                                                              Davao 2006  

Dr.Sopon Pornchokchai (sopon@area.co.th) has been AREA President since 1991. He is an experienced valuer and researcher in Thailand and the ASEAN Region. Prior to starting AREA, he was a consultant to the ESCAP, UN-Habitat, International Labour Organization and other international organizations.
Agency for Real Estate Affairs, Thailand's independent property consultants specializing in international standard valuation, survey, research and information services while refraining from real estate brokerage and self-interest property development to avert a potential conflict of interest, thereby ensuring the integrity of our valuation and research work.