Metro Manila condo oversupply now equivalent to 34 months

The oversupply of condominium units has shot up to an equivalent of 34 months as of November amid the sudden increase in availability of units, according to data released by Leechiu Property Consultants (LPC).

According to LPC Research and Consultancy director Roy Golez Jr., the latest level should have been close to net zero as there were 4,000 units in additional supply and 4,000 units sold, but there were 6,000 backouts since the 29 months’ worth of supply was recorded as of the third quarter

This means that it will take 34 months for the current supply to be sold, given the prevailing sales pace. LPC earlier said the market would normally see 12 months as a maximum.

“What we do is we track monthly and quarterly ‘di ba, so ‘yung availability ng units, biglang dumami. Dumami, ibig sabihin ni-release ulit sa market so they were already sold, parang either blinock off na because may down[payment] pero hindi na tinuloy, so mostly ganon,” he said in an interview.

(What we do is we track monthly and quarterly, right, so the availability of units suddenly shot up. It increased, meaning they were re-released into the market, so they were already, either they were blocked off already because there was a down[payment] but the transaction did not push through, mostly that.)

“Normally, lumalaki ‘yan pag na-turnover ‘yung units kasi by the time maging finished ‘yung unit for turnover, kino-call na ‘yung buyer, sasabihin na ‘So buyer, ano, babayaran mo na ba ‘yung 80% na balanse?’ Ngayon, kung hindi siya makahanap ng financing or whatever, hindi matutuloy,” Golez said.

(Normally it increases during the turnover of units because by the time that units are finished for turnover, buyers are called and told ‘So buyer, will you be able to pay the 80% balance?’ Now if they do not find financing or whatever, it will not push through.)

There were 4,971 new units launched in October and November, versus the 4,375 units sold during the period.

Year-to-date, condominium take up was recorded at 25,565 units, equivalent to 63% of that recorded in the comparable period of 2023 while project launches stood at 13,226 or half of the previous year.

Golez earlier also noted that the oversupply was due to a mix of high interest rates and external concerns, as well as a shift in preference to single-detached homes and properties in nearby provinces.

Asked if the current oversupply could increase further in December, Golez said that the market will have to wait and see as there were no trends recorded in previous years.

“Tinignan namin over the years, tumataas ba pag December o bumababa, eh it goes both ways eh. Walang trend. Sinubukan naming tignan ‘yun. So it can go both ways,” he said.

(We looked at the previous years if it increased or decreased in December. There is no trend. So it can go both ways.)

— RSJ, GMA Integrated News