Demand for housing to remain robust

Demand for residential properties is likely to stay as long as interest rates remain in the low single digits, a real estate consultancy firm said. Jones Lang LaSalle Leechiu (JLLL) said the supply of residential units is “just right” for the current level of housing demand as the low interest rates make condominiums more accessible to buyers.

“If interest rates go up, it will depend on how much. If it increases too much, it will be difficult to have good installment packages,” Nando Camus, JLLL chairman, told The Manila Times.

The Bangko Sentral ng Pilipinas said it is likely to keep key interest rates at their lowest level for the rest of the year, barring any price shock or any event that would raise inflation expectations.

Most local banks forecast that the central bank will start tweaking its key rates next year as the economy starts to pick up.

Camus said the demand for residential developments is being driven by theyoung professionals or the “yuppies”, who want to live near their place of work instead of going home to the cities’ outskirts or suburbs.

Property developers have launched specific projects targeting the urban professionals. SM Development Corp. (SMDC) has ventured into the low-cost housing segment with a new brand called My Place, which tapped a younger market “that yearns for independent living.”

“Condo living is becoming more popular because the trend now is to live closer to where you work,” Camus said.

The JLLL executive said this is the reason behind the success of the SM Group’s housing arm, the largest residential developer in Metro Manila in the first semester in terms of number of units sold and value of sales.

“SMDC has caught many developers by surprise. They have bought a lot of good properties along the MRT stations and SM malls. They’re well located,” Camus said.

The company was also able to create synergies with its malls as it developed affordable and fully-furnished residential units, complete with appliances that home buyers can easily purchase from SM outlets, the JLLL executive said. –KRISTA ANGELA M. MONTEALEGRE REPORTER, Manila Times