Will something so high come down soon?

SIX MONTHS have come and go. Now, the property industry is set to embark on the next six months of what is shaping to be a most productive 2015. But with the way things are going, what could come up along the way?

INQUIRER Property recently asked some of the leading property analysts in the Philippines for their fearless forecast for the next half of 2015.

Claro dG. Cordero Jr., head of research, consulting & valuation of Jones Lang LaSalle Philippines Inc., said: “We do not see any major surprises for the rest of 2015, especially since the economic fundamentals are sound enough to drive further growth in the property sector. While there are concerns that there may be negative factors affecting property demand (such as disruptions in the flow remittances from overseas Filipinos, among others), we think that these are not likely to happen and property demand (along with their respec- tive drivers) will continue to grow.”

CBRE Philippines, in a statement, said: “There is a small chance for more surprises to come up, as developers usually announce their projects at the start of the year to hype the market.”

Enrique M. Soriano III, Ateneo program director for real estate and senior adviser for Wong+Bernstein Business Advisory, said: “Will the sector show signs of cooling off in the next half or early 2016? It is likely. My argument is very fundamental, in any economic activity, what comes up must come down soon.”

Looking at things from the seven “growth areas,” here are the analysts forecast:

1 Residential segment. “We will be celebrating more than a decade of unprecedented growth in the property sector, and from a purely rational economic thinking, we will likely contend with headwinds as a result of oversupply and buyer caution in the residential segment,” Soriano predicted.

2 Retail malls. CBRE expects the launch of major malls, such as the Festival Mall Expansion, Solaire Mall, Paradigm, Grand Canal Mall and

South Park Mall to add a total GLA (gross leasable area) of 207,000 sqm.

3 Office market. “The office market is expected to maintain an upward movement with the projected introduction of about 780,000 sqm of office spaces in the next two quarters of 2015,” CBRE added.

4 Fortified Bonifacio Global City. “Fort Bonifacio will also experience a spike in supply this year of more than 320,000 sqm,” said CBRE.

5 More PPPs. The robust activity in the industrial sector is anticipated to further heighten as more PPPs (public-private partnerships) materialize, according to CBRE.

6 Strong imports. “Imports are also expected to increase due to the PPPs, especially from firms handling steel and iron which are raw materials for the projects. These strong imports would also entail higher demand for warehouse space,” said CBRE.

7 Real estate developments. Soriano said that “government agencies like the BSP (Bangko Sentral ng Pilipinas) are doing an excellent job keeping stakeholders in check and issuing restrictions on borrowing, the setting up of a real estate index and regulatory rulings to contain what economists normally refer to as ‘irrational exuberance.’”

“As to the prices, it will be stable and resilient as developers will stand their ground, especially for projects with better offerings (projects with commercial developments, near malls, MRT/LRTs and those built by branded developers). These projects will continue to resist a possible decline in pricing levels,” added Soriano.