In its latest report released Monday, Oct. 3, 2022, Colliers said Cebu has diversified projects that serve the residential needs of young employees to the more discerning investors. It projects a recovery in residential demand beyond 2022 to be supported by regional economic growth, inflow of remittances and sustained business process management investment.
In the first half of the year, Colliers recorded a total of 2,767 condominium units sold in Cebu, up 67 percent year-on-year. It expects take-up to be supported by overseas Filipino workers (OFW), investors and end-users’ demand for leisure properties.
“Despite Covid, Colliers observed that demand for condominium units remained resilient in Cebu. From 2019 to 2021, an average of 6,700 units were sold annually in Metro Cebu. This is even higher compared to the annual average of 6,300 units taken up from 2016 to 2018,” the report said.
Demand for condominium units in Cebu remains to be mainly driven by economic to mid-income projects (P750,000 to P6 million), accounting for 86 percent of total take-up in the first half of 2022.
Meanwhile, the share of upscale and luxury projects (P6 million and above) increased to 14 percent during the first semester, from eight percent year ago.
“In our opinion, the renewed demand for leisure-oriented properties will mainly be driven by the easing of travel restrictions. This will further help in increasing the share in the net take-up of the upscale and luxury projects moving forward,” Colliers said.
“As the biggest residential market outside of Metro Manila, Cebu is expected to make a comeback in the coming years. Its strength as a residential location lies in the variety of market segments that it serves. However, buyers have become more sophisticated and complex, so developers must be able to provide value for money amenities and features to capture the discerning eye of the Cebu buyers,” said Karla Domingo, director for advisory services at Colliers.
Colliers also sees the completion of 10,141 new condominium units in Cebu in 2022.
From 2022 to 2026, “we project the delivery of 5,160 units annually, with Cebu City covering nearly half of the new supply,” the company said.
Cebu has the largest condominium stock outside of Metro Manila with 57,900 units as of the first half of 2022.
Condo prices
In the first six months of the year, Colliers also recorded a nine percent increase in condominium prices in Cebu as mid-income and luxury projects covered about 79 percent of new launches during the period.
This growth should be sustained as national developers assess Cebu’s viability for higher-priced units, the firm said.
Meanwhile, a total of 560 house and lot units were sold in the first six months of the year, down by 24 percent.
Horizontal demand is also dominated by economic to mid-income projects, with a share of 84 percent in the total take-up during the period.
Colliers believes that these price segments remain popular especially among OFW households. For the past 12 to 24 months, Colliers observed that fringe areas such as Talisay, Liloan, Carcar and Naga are the most preferred locations for house and lot developments.
To take advantage of this upbeat recovery, Colliers advised developers to further explore opportunities in the market and continue offering attractive promos and flexible payment schemes as well as explore alternative locations for residential development.