Construction projects down in July

Construction projects in the country registered declines both in terms of number and value in July from a year ago, according to the Philippine Statistics Authority.

Preliminary data released by the PSA showed that there were 14,343 construction projects from approved building permits in July this year, 2.4 percent lower than the 14,689 recorded in the same month last year.

The value of construction projects also dropped by 14 percent to P41.21 billion in July this year from the previous year’s P47.95 billion.

Residential projects accounted for 67.3 percent of the total construction projects in July.

There were 9,652 residential projects in July, down by 2.9 percent from 9,944 projects in the same month a year ago.

The value of residential projects in July dipped by 10.5 percent to P15.97 billion from P17.85 billion in the same month in 2023.

Meanwhile, the number of non-residential projects went up slightly to 2,907 in July from 2,903 in the same month last year.

The value of these projects dropped by 16.9 percent to P21.41 billion in July from P25.77 billion in the same month of 2023.

Permits for additions or any construction involving increases in the height or area of an existing building, also decreased by 7.6 percent to 500 in July from 541 in the same month of the previous year.

In terms of value, these projects rose by 21.6 percent to P438.30 million in July from P360.35 million in the same period a year ago.

Alterations and repairs of existing structures increased by 2.5 percent to 993 projects in July from 969 projects in the same month of 2023.

The value of alterations and repairs decreased by 18.4 percent to P3.07 billion in July from P3.76 billion in the same month last year.

Source: Philstar

Construction materials price growth slows in July

The retail price growth of construction materials in the National Capital Region (NCR) slowed down in July compared to last year's rate, according to the Philippine Statistics Authority (PSA).

In its latest report, the PSA said that the average growth of the construction materials retail price index (CMRPI) in the NCR slowed down to 1.1 percent last month from 1.5 percent in July 2023.

On a monthly basis, it moved up from February's 1.0-percent growth rate.

The PSA said that the primary contributor to the monthly uptrend of the CMRPI in the region was the higher annual increase in the heavily weighted tinsmithing materials index at 1.6 percent from 1.2 percent in the previous month.

In addition, two commodity groups registered annual increases in July as compared with the previous month.

Carpentry materials posted a 0.6-percent growth last month from the 0.2 percent in June and electrical materials at 1.6 percent from 1.4 percent in a month earlier.

Commodity groups that retained their previous month's annual rates include painting materials and related compounds, 1.4 percent; plumbing materials, 0.2 percent; miscellaneous construction materials, 2.1 percent; and masonry materials, 0.2 percent.

On the other hand, the year-on-year growth rate of the construction materials wholesale price index in the NCR inched up to 0.5 percent in July from 0.4 percent a month earlier.

However, this was slower from last year's annual rate registered at 5.7 percent.

During the month, increases in annual growth rates compared to June 2024 were posted in some commodities. Electrical works rose faster at 3.2 percent from 1.5 percent in the previous month.

Faster annual increases were also recorded in the indices of metal products at 1.1 percent from 0.9 percent and plumbing fixtures, and accessories/waterworks at 1.0 percent from 0.9 percent.

Slower annual increases, meanwhile, were observed in the indices of fuels and lubricants to 12.9 percent in July from 14.1 percent in the previous month; PVC pipes to 1.3 percent from 1.4 percent; and painting works to 1.3 percent from 1.7 percent.

Source: Manila Times

Residential prices expected to rise 2.2% annually through 2026

Residential real estate prices in Metro Manila are projected to increase by 2.2% annually through 2026, reflecting a “flattish recovery” amid the exit of Philippine Offshore Gaming Operators (POGOs), according to Colliers Philippines.

“Prices are likely to revert to pre-pandemic levels in the third quarter of 2029,” Joey Roi Bondoc, director and head of Research at Colliers Philippines, said during a briefing on July 31.

The Philippine residential segment will see elevated vacancies as POGOs are set to vacate the country by year-end, according to consulting firms.

Colliers forecasted that rents are set to grow by 1.6% annually from 2024 up to 2026 and will return to pre-pandemic levels in the second quarter of 2028.

“The growth of residential real estate loans is slowing down. From 2017 to 2019, which was a peak period for residential demand across the Philippines, especially in Metro Manila, demand was partly influenced by POGO demand,” Mr. Bondoc said.

President Ferdinand R. Marcos, Jr. has ordered a total ban on all POGOs due to their ties to illicit activities such as financial scams, money laundering, prostitution, and human trafficking.

Metro Manila central business districts currently have 159,000 condominium units as of the second quarter of 2024.

“Currently, vacancy is at 17.7%. With POGO demand, we’re likely to see that inching up to 25.4% by the end of 2024,” Mr. Bondoc said.

The Metro Manila vacancy rate will reach 24.9% in 2025, he said.

He added that for the Bay Area, where POGO employees and residents are mostly concentrated, vacancy is expected to surge to 55% from the current 28% without POGOs by the end of the year, and 53% in 2025.

Meanwhile, Leechiu Property Consultants, Inc. Founder and Chief Executive Officer David Leechiu said the residential sector’s high-end condominium market will continue to be resilient, but the middle market “will be hurt badly.”

He added that the middle market condominium will become cheaper to rent and will fall even faster and deeper than the office segment.

“I think what used to rent for P600 per square meter will very soon be renting for P300 or P250 per square meter in residential,” Mr. Leechiu said.

POGOs will vacate a million square meters of residential space, he said.

“I think a lot of the consumer sector will also be impacted because these POGOs employ thousands of Filipinos that are local that have to submit their recordings, and then, now, it’s going to be harder,” he added. 

Source: Business World