NCR Faces Fall In Real Estate Projects

Shift in NCR's Real Estate Landscape

New Project Launches Witness 20% Decline in H1 2008

The national capital region (NCR) has experienced a significant slump in new housing project launches, with a 20% drop recorded during the first half of 2008 (January-June). This downturn can be attributed to two primary factors:

  • Appreciation in Real Estate Prices: Steadily increasing property prices have led to a slowdown in demand.
  • Rising Interest Rates for Borrowers: Higher interest rates have made home buying more expensive, further dampening demand.

Developers Adapt with Mid-Income Focus

In response to the changing market dynamics, developers in the NCR have shifted their strategy towards mid-income housing. This strategic pivot is reflected in the launch numbers:

  • High-End Project Launches Plummet: A sharp decline of two-thirds to just 5 launches in the high-end category.
  • Mid-Income Housing Project Launches Surge: An over 20% increase to 37 launches in the mid-income segment.

Market Absorption Rates Tell a Story

A report by international property consultancy firm DTZ highlights the absorption rates for July:

  • Mid-Income Houses: 76% absorption rate, indicating brisk sales.
  • High-End Houses: 68% absorption rate, signaling slower sales compared to mid-income units.

Future Outlook: Mid-Income Housing to Dominate

The DTZ report forecasts a significant rise in the share of mid-income housing in the overall residential supply:

  • Projected Share in Three Years: 62%, up from the current 22%.
  • CAGR for Mid-Income Housing Units: A staggering 131%.