Real estate sector in Visayas, Mindanao seen to take off

The strong real estate potential of Visayas and Mindanao (VisMin) is seen to be sustained this year by an expected economic recovery and the continued rollout of infrastructure projects, according to a report by Philippine Daily Inquirer.

Key locations such as Cebu, Iloilo, Davao, Cagayan de Oro and Bacolod, for example, continue to be attractive, viable real estate investment hubs as evidenced by the steady demand for residences, offices and commercial spaces in these provinces.

Healthy demand

In Cebu province, residential developers and investors are banking on the expected rebound from the COVID-19 pandemic to further boost an already healthy demand for real estate projects, particularly for integrated mixed-use communities, according to a report published by Colliers Philippines.

Colliers thus encourages developers in Cebu to respond to the potential demand for mixed-use communities which feature office towers, residential condominiums, malls and institutional facilities. It further sees the completion of major infrastructure projects boosting the attractiveness of condominium projects within integrated communities due to rental prospects and potential for price appreciation.

Demand for condominium units in Cebu, according to Colliers, is seen to pick up this year, to be sustained largely by end-user demand. It expects the completion of 10,270 new condominium units in the province in 2022, while prices are seen to grow by 2.5 percent.

Viable investment location

Colliers meanwhile sees Iloilo as a rising residential hub in the Visayas.

In its report, Collier said it will “continue to rise as a viable residential investment location as commercial activities continue to increase in the province. It is among the preferred locations for outsourcing companies that are expanding outside Metro Manila.”

“Greater business activities within the city’s integrated communities should positively influence demand for condominiums located in the city’s townships,” Colliers said.

In particular, office leasing recovery and sustained introduction of new supply are also seen to positively influence demand for condominium units. Colliers projects the delivery of new condominium units in Iloilo to reach 860 units annually from 2022 to 2026, while prices are expected to grow by 2.8 percent a year over the next five years. Demand for horizontal developments (house-and-lot units) continues to be robust as well.

Gearing for recovery

Davao developers are now bracing for a rebound, according to Colliers, which sees this area retaining its stature as one of the more attractive residential investment hubs in Mindanao.

“In our view, Davao’s residential market will continue to benefit from the region’s economic recovery beyond 2022. Despite market disruptions due to COVID-19, demand, primarily seen to be coming from OFWs and investors, is still expected to take-up inventory as the country starts to ease mobility restrictions and economies open,” it explained.

“Colliers sees an improvement in demand beyond 2022 and this should play a crucial role in raising property prices and improving the feasibility of alternative sites for residential projects,” Colliers further said.

For this year, Colliers sees the delivery of 1,790 condominium units in Davao, while condominium prices here are seen to grow by an average of 3 percent a year from 2022 to 2026 as more national players continue to launch new projects.

Horizontal projects are likewise seeing healthy demand, remaining an attractive investment option among OFWs.