Is Cebu "overmalled"/ "overcondominiumed"?

Two weeks ago, Ateneo University Professor Soriano was in Cebu and issued a statement that there is already an oversupply of condominiums in greater Cebu City. He happens to be the professor and professional consultant that specializes in property investments and development, so he made the front pages of the local newspapers. He avers that there is already a noticeable slowdown in condo sales especially from local buyers and OFWs. The active buyers seem to be from the neighboring provinces but these would not be enough to absorb the units that are coming on stream in 2018 and 2019. Without totally refuting Soriano, some of the local condo developers reacted by saying that so far, their sales have been good and they are proceeding with their projects. Anecdotal evidence supports the assessment of Soriano from the number of calls, texts, and emails from brokers who are offering condos with built-in financing. A cursory visit in the parking lots of some of the finished high-end condos shows that the parking lots are half empty. It is either the units are sold or the units are for lease and there are no lessees.

From a macroeconomic viewpoint, the demand and supply of condos is directly related to the growth of the economy and the distribution of the benefits of a growing economy. If the economy is growing at 6.9% as was recently announced by NEDA, then the nominal growth would at least be 10% given the 3% plus inflation. The structural make-up of the Philippine economy would put a lot of new wealth on the upper middle class (including the OFWs), and the upper class, and these have been the big buyers of condos in the last seven years. The problem is that at our current rate of economic growth, these sectors are not growing fast enough to absorb the 20% growth in supply spurred by liquidity and low interest rates. It is noticeable that the car market is growing at 22%, since the lower middle class is included in this buying sector. Cars are lower priced and BPO employees will buy a car before buying a condo. We are beyond the condo equilibrium point of demand and supply but not yet a "bubble." We are headed for a serious oversupply unless corrective measures are done, like delaying some of the projects or shifting to a different market.

The big developers who have huge financial resources and liquidity, being connected to banks and conglomerates can get through rough oversupply times, but the small developers who depend on pre-selling and bank loans may not be able to withstand the potential crisis and may end up with unfinished and unsalable units. There is also the possibility that events outside of the economy may trigger a sharp drop in condo demand and these are: political instability like a "revolutionary government," a major terrorist attack in a major city, and/or a North Korean war. These will sharply slowdown the economy and dry up the condo market.

On the issue of too many malls in Metro Cebu, I am inclined to believe this is already happening. There are already six supermalls, seven intermediate size malls, more than a dozen strip malls, and many large supermarkets. Considering the per capita income of the Filipinos, adjusted for purchasing power parity, the population to mall ratio would be 500,000 to one supermall. The total population of Metro Cebu including the daytime population from the neighboring provinces of 4 million would only be able to support half the number of malls and superstores that we have now. So, you can observe a lot of empty store spaces and sparse buyers in some of the malls even on weekends and especially on weekdays.