The local property sector is nowhere near any bubble with residential and office rental rates and their property values in Metro Manila’s major central business districts (CBDs) are still likely to rise within the next 12 months on buoyant demand, property experts from Colliers International said. In a briefing on Friday, Colliers Philippines associate director Julius Guevara said 5,900 additional residential units were likely to be completed each year, bringing the residential stock in major CBDs to 64,000 units by end-2014, 38 percent higher than the level in end-2011.
While the property was inherently cyclical, Guevara said in an interview that there were ways to avoid forming a bubble. Apart from closely monitoring market trends, he said the strategy of pre-selling a critical mass before starting construction was a big help to developers. “It’s less speculative if they do it based on demand,” he said.
“Not all cycles end in bubbles,” said Colliers Philippines managing director David Young, noting that at the moment, property supply and demand were moving in the same trajectory. He said there was no cause for alarm “unless we see a significant surge in construction levels where suddenly demand is not there to fill that space up.”
Source: Philippine Daily Inquirer 09.03.12
