Studio-type, one-bedroom units best-sellers in
condominiums
An article published in
BusinessWorld, March 30, 2006
By: Jennee Grace U. Rubrico, Senior Reporter
STUDIO -- (n.) An apartment with a living
space and a bathroom and a small kitchen [syn: studio apartment]; workplace
consisting of a room or building where movies or television shows or radio
programs are produced and recorded
Think studio apartment and immediately there appears an image of a cozy
environment tucked inside a building--probably a multilevel -- called home.
Blame it on the romanticized depiction of these units, but studio units have
gained a reputation of being a start-up individual's watering hole from the
hustle and bustle of city life.
Studios and one-bedroom apartments have so far been the best-selling units
for condominium projects, property developers said.
"If you look at it in a developer's perspective, what sells is the one
bedroom and studio units. That's the bread and butter," said Danilo Ignacio,
Robinsons Land Corp.'s general manager for the high-rise buildings division.
The units, which are between 16 and 20 square meters and which could cost
below P1 million, are attractive for their affordability.
And analysts said given a four-million unit housing backlog, affordability
is what matters most to many.
"The basic trend is that this is for end users," Asian Institute of
Management professor Danilo A. Antonio said, adding that units are becoming
smaller to accommodate the financial capacity of buyers.
Ryan Isip, CB Richard Ellis Philippines' associate director for global
corporate services, said while many condominium unit buyers cite the small
units as good investments, they actually end up either living in it or
having their children occupy the pad.
The buyers of such units are mainly young urban professionals, start-up
families and well-to-do students.
Beyond this group, analysts and property developers said around 30% of the
units are bought by so-called hard core investors or those who buy to
sublease the unit.
"They buy the unit and over time they can lease it and their money can
either go to them as monthly income or to the monthly amortization of the
unit," Mr. Isip said.
Mr. Antonio said an example of this trend is renting the units as
dormitories for students or professionals. "This is being done now in
downtown Manila."
Most developers do not oppose subletting. Robinsons Land, for instance,
allows buyers to lease the units in its projects. "There are no restrictions
on subletting. We allow the unit owners to lease their units," Mr. Ignacio
said.
Meanwhile, some investors also buy the units to resell them at a later time,
analysts said.
They said these investors take advantage of the low preselling price of the
units and later on make money upon completion.
Mr. Antonio, however, noted that unlike other countries, the investor market
is not a major business as yet for those engaged in buying and selling units
given the relatively small secondary market in the property sector.
He is giving the secondary market five years to become a lucrative
undertaking.
Those who use their properties as collateral against loans are also
considered as investors, some analysts said.
But Mr. Isip also noted that only those who have good credit standing could
benefit from using their properties as collateral since the loan rates would
be based on creditworthiness.
"Otherwise, if they get high interest for their loan, it's not going to work
for them," he said.
Mr. Antonio said many condominium buyers who purchase on investment are
Chinese Filipinos "who don't want their money to sleep. They want their
money to grow and their haven for money is real estate."
Mr. Isip, however, said anyone who would want their money to grow would
consider buying condominium units as an investment.
"This is not driven by heritage or race. Investors are those who want their
money to work for them [or invest in real estate]; in Pilipino, they are
referred to as negosyante [astute businessmen]."