Flexible terms key to boosting RFO condo demand, says Colliers

CONDOMINIUM developers in Metro Manila should highlight their extended and flexible payment terms to boost demand for ready-for-occupancy (RFO) units, according to property consultancy firm Colliers Philippines.

According to Colliers’ Manila Survey Flash Report, which included a survey of about 300 property stakeholders nationwide, 69% of respondents would likely buy a condo in Metro Manila if offered extended and flexible payment terms.

“Developers should continue highlighting their attractive and flexible terms to further stimulate demand in the residential market, which has also seen a more pronounced shift to suburbia (or the development of projects outside Metro Manila),” Colliers said in the report.

As of the end of 2024, the Metro Manila condo market had a total of 74,400 unsold units, with about 26,300 classified as RFO projects. Colliers earlier said it may take over eight years to sell out the existing inventory.

Other promotions that would encourage buyers to purchase a condo include no spot downpayment (12%), early move-ins (8%), free furniture or appliances (7%), and no reservation fees (4%), Colliers said.

To attract buyers, several developers offered up to 30% discounts on the total contract prices for spot cash payment, compared to 10% before the pandemic. Some have offered 5% to no downpayment and extended their payment terms for as long as 48 months.

According to the survey, Pasig City (24%) is still the most preferred location for condo investments outside the more established business hubs like the Makati central business district (CBD), Fort Bonifacio, and Ortigas Center.

Likewise, Makati Fringe (22%), Quezon City (19%), Alabang (19%), Bay Area (13%), and Manila (3%) were also preferred submarkets for investors.

However, only 24% of those surveyed said their next residential development would be a condo unit in any major CBD.

In contrast, nearly 70% prefer to invest in a house-and-lot or lot-only unit, eyeing regional locations like Cavite, Laguna, Batangas, Pampanga, Bulacan, and Tarlac.

Colliers conducted both onsite and offline surveys with about 300 end-users, property equity analysts, and investors nationwide. The survey was conducted during the first week of February.

‘STABLE’ LUXURY SEGMENTMeanwhile, the capital region’s luxury and upscale segment remains stable, accounting for 41% of Metro Manila’s condominium launches in 2024, Colliers said.

In particular, the Manila Bay Area is expected to be a premier lifestyle destination amid rising demand from expat Filipinos and investors across the Asia Pacific, according to UK-based real estate consultancy firm Knight Frank.

“Luxury residential properties in and around Manila Bay have enjoyed a surge in popularity, resulting in significant appreciation in valuations driven by high pre-selling prices,” Christine Li, head of research, Asia Pacific at Knight Frank, said in its latest “The Wealth Report.”

The Bay Area, which includes the cities of Manila, Parañaque, and Pasay, is home to many casinos, hotels, and retail establishments.

The price of Metro Manila’s luxury residences increased by 17.9% in 2024, ranking second in Knight Frank’s latest Prime International Residential Index (PIRI). The PIRI monitors the movement of luxury residential prices across 100 city and second home markets.

According to the property consultant, Metro Manila’s luxury property prices are rising as the country’s economy continues to expand.

“Local wealth creation has spurred the rapid expansion of investable luxury residential developments, particularly in the city’s core business districts, attracting foreign investors from within Asia-Pacific,” Ms. Li said. — Beatriz Marie D. Cruz