Developers in Metro Manila must monitor interest rate hikes during the post-COVID recovery. According to a recent report from Colliers International Philippines, this will allow them to take the correct steps over the coming months and ensure the real estate market continues moving forward.
Employees returning to the office helped support the early stages of Metro Manila’s property market recovery. Research from Dot Property Group found that condo demand in the city soared during the first half of 2022. Between the fourth quarter of 2021 and first quarter of this year, a 17.8 percent increase in inquiries was recorded. That was followed by a bigger jump in the second quarter when interest rose by 28.2 percent when compared to the previous three months.
“The pre-selling condominium market is starting to see glimmers of hope especially with take-up recovering in the first nine months of 2022. Upscale, luxury and ultra-luxury projects are also making a comeback, and are likely to show sustained demand beyond 2022,” Joey Roi Bondoc, Colliers International Philippines Associate Director, Research, stated. “Colliers believes that developers need to be cautious with rising interest and mortgage rates and the potential impact of a total POGO+ exodus on the secondary market. Compressing yields and costly construction materials could stifle launches across Metro Manila.”
Colliers urged homebuilders to continue monitoring the situation and tailor promotions and payment schemes to what the market needs. The BSP has raised interest rates five times in 2022 as it looks to curb inflation. This move also affects mortgages with increases meaning it costs more for people to take out a home loan. According to the central bank, more movement could be possible.