No fear of bubble burst in Davao’s condo segment
DAVAO CITY — At the rate condominiums in the city are being planned, marketed, built, and sold by both major and local developers, there appears to be no fear among property sector players of a bubble suddenly bursting — at least not in the short term.
National Economic and Development Authority- Davao Region Director Maria Lourdes D. Lim has recently urged developers to come up with a sector study to prevent a situation similar to the 1997 Asian financial crisis, wherein projects were abandoned and companies ended up in huge debts.
Companies, however, are content for now to race along based on uptake, their own market assessments, and “gut feel.”
“In other places like Metro Manila, their inventory (of unsold condominium units) could reach to about two years. Here we are happy that inventory is just about a year,” said Ricardo F. Lagdameo, vice-president of homegrown Damosa Land, Inc., which is developing a six-building complex in the northern side of the city.
“We are ahead of our initial timetable,” he said, explaining that construction work as well as sales targets have been “six months ahead of schedule.”
Mr. Lagdameo added that based on their company’s internal evaluation, the market can still absorb the overall sector inventory of condominium units planned, under construction and those ready for occupancy but still unsold.
“We believe that the market will not burst within the next two years as buyers continue to patronize not just our project but the entire industry in the city,” he said.
HIGH-END
Phinma Property Holdings Corp., part of the diversified Phinma group, announced last week that it is accelerating the construction of a fifth building in its Arezzo Place project, a high-end condominium in Davao City, given robust sales.
The fifth building, which was not originally scheduled for development this year, will be part of the 12-building residential complex located in a 2.6-hectare property located at the city’s Pampanga area.
“Our first building in Arezzo Place Davao is currently being turned over to the unit owners. Our second building is in its finishing/punch-listing stage that we will actually start turning over units in August this 2017,” Phinma Properties Vice-President for Urban Housing Division Raphael B. Felix said in an interview.
He also said that the third building, which is practically sold out, was topped off in the last week of May 2017 and they are expecting to finish construction by November this year.
Construction for the foundation of the 4th building, with units mostly taken, has started.
Each building is five stories high with 18 units per floor.
DMCI Homes, the condominium developer of the Consunji group that took over from a sister company the 1,978-unit Verdon Parc project located near the city center, is also confident of a continuing buoyant sector.
“Our gut feel is that the market is still okay,” said DMCI Homes President Alfredo R. Austria in an interview during the recent launch of their project’s communal facilities, even as he admitted that they do not have solid data on market absorption capacity.
Mr. Austria said they are already in the planning stage for a second project.
There is no readily available information on the condominium inventory in the city, but a lot of construction is visibly going on with projects covering all market segments from low to high-end — by such big players as Ayala Land, Inc., Megaworld Corp., Filinvest Land, Inc., and Vista Land & Lifescapes, Inc., as well as homegrown developers like Escandor Development Corp.
Mr. Austria said the actual status of the market remains “a guessing game” — and investors, as the rising buildings indicate, are willingly betting.