Date posted: Tuesday, March 18, 2014 | Manila, Philippines
BY Judy Dannibelle T. Chua Co, Senior Researcher
Amid high supply of real estate, developers apply for less licenses to sell in 2013
GOVERNMENT-ISSUED real estate permits declined in 2013 from a year ago, as developers stayed on the sidelines to wait for the market to absorb existing supply.
Housing and Land Use Regulatory Board (HLURB) data showed that it released a total of 355,852 new licenses to sell last year, down by 17% from 2012.
The double-digit drop in licenses to sell residential units such as houses and lots and non-residential units such as condominium units for commercial use was a turnaround from the 39% increase recorded in 2012, marked by a real estate boom.
“The total number of licenses to sell may have dropped temporarily as the market is still absorbing the level of supply completed in the previous years,” said Claro dG. Cordero, Jr., head of research, consultancy and valuation at property consultant Jones Lang LaSalle Philippines, Inc.
HLURB data showed less licenses were issued for both residential and non-residential units.
The number of licenses to sell condominiums for commercial use, subdivision units for industrial and commercial use, farmlots and plots or niches in memorial parks fell by around 21% in 2013, in a reversal of the 20% gain in the previous year. The housing agency issued 130,801 permits.
Mr. Cordero, however, noted that while licenses to sell for non-residential developments fell as a whole, permits for condominium units for commercial purposes rose.
“The number of commercial condominium developments intended for strata-title sale increased and… there are a number of commercial condominium developments in Bonifacio Global City that are currently pre-selling,” he said.
Strata-title sale refers to the sale of individual condominium units covered by individual titles.
Among these developments are High Street Corporate Plaza by Alveo Land, One World Place by Daiichi Properties and One Park Drive by Avida Land.
The number of licenses to sell residential properties, meanwhile, slipped by around 15% to 225,051 in 2013.
Residential properties encompass houses and lots and condominiums developed under Presidential Decree 957, which regulates the sale of subdivision lots, and Batasang Pambansa 220, which aims to promote and encourage the private sector to develop economic and socialized housing projects for average and low-income earners in urban and rural areas.
Despite the drop in 2013, Mr. Cordero gave a positive outlook for this year given that new projects were launched in the first two months of 2014.
“The growth of the property industry remains on track with the over-all growth of the economy, as shown by the continued growth of the various economic indicators supportive of the growth of demand for the property industry like the offshoring and outsourcing expansion, growth of tourist arrivals, among others,” he added.