Low-cost housing competition tightens
(Malaya Business Insight)
Phinma Property Holdings Corp. is feeling the pinch of tighter competition in the low-cost housing segment as new players enter the market and external factors weigh down demand.
For now Phinma Property is watching closely how the overseas debt crisis will affect overseas Filipino workers’ capacity to buy houses. Concerns over the European debt crisis and the US economic slowdown are eroding the spending capacity of OFW families, Phinma Property president Willie Joven Uy said.
"We want to look at the prospects for job security first," said Uy, adding that 14 percent to 16 percent of company’s sales come from OFWs.
The biggest challenge for the company, however, is the additional supply that new players bring into the market as big developers build own units that target the segment whose price is capped at P3 million per unit, Uy said.
Ayala Land Inc. has created unit Amaia Land to develop units that will focus on this market. Its first offerings are Amaia Scapes, Amaia Steps, and Amaia Skies.
SM Developments Corp. is also venturing into the segment with its M-Place developments with two locations already identified for the brand.
"There is a lot of supply going out now. (Unlike) two years ago when iilan lang ang players sa segment na ito," Uy said.
More than half of the current housing backlog of 3.6 million units is estimated to come from the middle and lower segments of the property market that were not serviced by most developers in the past.
Seeing a niche, Phinma Property developed five-story projects that offer units priced at P2.5 million to P3 million. Among the projects are Fountain Breeze, Flora Vista and Sofia Bellevue.
Phinma is also busy with ts Asya Residences in Alabang.
For the year, Phinma is eyeing P400 million of capital expenditures to build a total of 4,000 units, compared with 3,200 last year.
Last year, Phinma had P300 million in capital expenditures. Uy said Phinma is also close to unveiling projects in Pasig and Davao.
http://www.malaya.com.ph/oct19/busi4.html
