Cebu’s real estate seen to still grow after 2015
THE real estate bubble in Cebu will continue even after 2015.
Prof. Enrique M. Soriano, program director for Real Estate Center for Continuing Education at the Ateneo Graduate School of Business, gave this observation during a real estate forum last Monday.
“A bubble is healthy. What is unhealthy is when it bursts. But then you need to temper it by coming up with tools to make sure that the bubble doesn’t drop, Soriano said.
He cited the 7,000 condominium units, which was scheduled to be completed by 2014, Cebu’s real estate industry would move up and by 2015 it would still be there.
“The key is that stakeholders should have a strategy. You need to change the way you do things. If you don’t have a strategy, you’re gonna fail,” he told forum participants.
Soriano said he saw little froths in the bubble in selected areas in Metro Manila but not in Cebu.
A real estate bubble occurs when there is a rapid increase in the valuation of real properties and reach a point where they outstrip the collective incomes of potential buyers, which occurs periodically in local and global real estate markets.
“It is simply a spiraling crisis and disappearing buyers, leaving some people holding a bunch of assets with nobody to pass them on,” he added.
He also said that price points, low borrowing rates, inexperienced players, and global events are the indicators which may induce a bubble.
He cited the GDP in Central Visayas as one of the factors in the real estate growth.
In 2012, Central Visayas was recorded to be the second in the fastest growing in terms of regional GDP. Caraga ranked first while Central Luzon placed second.
PRIVATE CONSTRUCTION
He said that private construction in Cebu went up to 12.4 percent (2010-2012) from 4.3 percent (2004-2009).
For retail, there are around 400,00 square meters estimated in Cebu.
“There are 30 malls in your island, you’re still in the strategy to survive,” Soriano said.
He also mentioned that there were closely half a million vacant spaces for offices and around 3,000 units will be delivered this year.
He said that almost 80 percent of residential and office developments were in the National Capital Region (NCR) and developers would jockey for every piece of real estate which might result to a continuous increase of land prices.
With this developers will shift from mid-rise to high-rise developments to offset the higher than usual land cost.
Thus, developers should disperse and move their thrusts outside NCR.
Soriano cited Cebu as one of the growth areas outside Manila.
