(File photo courtesy of Colliers)
MANILA – While the order of President Ferdinand R. Marcos Jr. for a total ban of Philippine offshore gaming operators (POGOs) may hurt real estate developers, particularly the condominium market, it also opens opportunity to local investors to buy residential units at a corrected price.
Colliers Philippines director for research Joey Bondoc told the Philippine News Agency (PNA) in a phone interview Tuesday that the price correction in the residential market in the National Capital Region (NCR) due to the POGO exodus will create a new demand for the developers.
Bondoc said that even before the order of President Marcos in his third State of the Nation Address (SONA) to totally ban POGOs, there was already an exodus of POGO at the height of the coronavirus disease 2019 pandemic.
He added that around that time, vacancy rate in the fourth quarter of 2021 was at 17.9 percent. The current vacancy rate is at 17 percent.
“The total banning of POGO will only dampen the already slow takeups for residential units. It will also exacerbate the rising residential vacancy and slower growth in prices and lease rates,” he said, adding that vacancy rate could hit 19 percent with the total ban on POGOs.
But Bondoc added that this condition has corrected the prices in Metro Manila’s residential market.
During the surge of condominium takeups in 2019 attributed to the demand from POGO workers, Colliers Philippines data showed that the price per square meter increased by 10.9 percent quarter-on-quarter in the fourth quarter of 2019.
From a double-digit growth in price increase in the residential market at the height of offshore gaming operations in the country, Bondoc said the POGO exodus has eased price growth rate in Metro Manila at around 2 to 3 percent over the next two years.
“It already corrected even the President made that directive. The lease rates are already recovering but in a corrected manner as we see rents to increase between 2 to 3 percent from 2024 to 2026,” he added.
Supply and demand
Bondoc said developers have delivered 11,300 residential units in NCR in 2023, which is close to the 11,700 units turned over in 2018 due to the surge in demand from POGO employees.
“Take note that these are projects that were launched at the height of the POGO demand in 2018,” he said.
Bondoc said despite the POGO exodus, these new units are expected to be taken up by local investors, especially overseas Filipino workers. (PNA)
