Property portal Lamudi Philippines recently reported that the size of condominium units in Metro Manila are decreasing, citing the declining number of lands for development as the main reason.
In its analysis, the online company noted that 42 percent and 41 percent of Metro Manila’s for-sale and for-rent condo inventories have floor sizes measuring 50 square meters (sq m) or smaller—an apartment size many would consider as a “shoebox.”
To support their research, Lamudi Philippines cited Colliers International’s 2014 fourth quarter report, which mentioned that 75 percent of the 30,000 preselling units expected to be delivered from 2015 to 2018 in the Makati Central Business District, Fort Bonifacio, Rockwell Center, Ortigas Center, and Eastwood City are studio and one-bedroom units, ranging in sizes from 18 sq m to 90 sq m. Some condo projects outside these areas have even been reported selling units that are no bigger than 15.5 sq m.
Further, Colliers pointed out that most of these units serve young urban professionals and investors who are seeking to diversify their portfolios. The downside, however, is that the influx of these smaller-sized units will create pressure on rental rates and resale prices.
Jose Romarx Salas, head of research at Pinnacle Consulting, said the trend is to go smaller. Back in the 1990s a condo project that squeezes in 200 units per tower was virtually unheard of. “Now, it is becoming the norm, with some developers launching projects with more than 30 condo units per floor, or approximately 1,200 condo units for a 40-story high-rise,” he said.
Based on Lamudi’s inventory, Quezon City has the greatest proportion of shoebox condos, while 72 percent and 67 percent of the city’s for-sale and for-rent condos, respectively, have floor areas measuring 50 sq m or smaller. The majority of these condos are newly built.
In Makati City 31 percent and 34 percent of for-sale and for-rent condos, respectively, are smaller than 50 sq m, while in Taguig the proportions are 26 percent and 32 percent, respectively. Most of Makati City’s inventories are either from older condos, which have larger units, or from high-end ones, which have fewer units per floor. Cost-wise, smaller does not necessarily mean cheaper, at least when you look at the per-sq-m prices of these apartments.
In Makati City the average asking price of small condos is P132,073 per sq m, slightly lower than the city’s average of P139,503. The averages for smaller condos in Quezon City and Taguig stand at P123,431 per sq m, and P118,634 per sq m, respectively, compared to the cities’ average of P111,241 per sqm and P125,032, respectively.
On the other hand, monthly per-sq-m rent of small apartments in Quezon City, Makati City, and Taguig average P601, P892, and P769, compared to these cities’ averages of P571, P832, and P835, respectively.
Organized in 2013 Lamudi is a global property portal, which focuses exclusively on emerging markets. The platform under the German online firm Rocket Internet is currently available in 32 countries in Asia, the Middle East, Africa and Latin America, with more than 900,000 real-estate listings across its global network.
(Reported by Rizal Raoul Reyes for The Business Mirror.)