Property developer Ayala Land Inc. expects residential cancellations to increase by 10 percent to 12 percent from the pre-COVID level in 2019 amid the challenging macroeconomic environment.
ALI president and chief executive Bernard Vincent Dy said in a recent analysts’ briefing he expected tempered demand on residential projects in the next six to 12 months, or until the global uncertainties were resolved.
“My expectation over the next six to 12 months, we will continue to see tempered demand for residential, until we see some of these macro issues and global uncertainties resolved, higher inflation, geo-political tension and supply chain issues. All of these issues will affect global growth, could affect our domestic growth and therefore will have impact on residential demand,” said Dy.
ALI said most of the cancellations would be in the middle-income market and would involve vertical developments.
Dy said the level of cancellations was not yet alarming at this point.
“Back out rates, in general, have been manageable so far. What I would expect as economy gets better, then I hope that situation holds,” Dy said.
The company said given the tempered demand for residential projects, it would launch P80 billion worth of residential projects this year, lower than earlier estimate of P100 billion.
ALI launched P35 billion worth of projects in first half and plans to start another P45 billion worth of projects in the second half.
“The difference really is coming from high-end vertical project that we would like to book build first to see see if we will proceed with the launch.
The project is ready, but we want make sure that we will have a robust take-up,” ALI said.
ALI said last week residential revenues fell 9 percent to P27.4 billion in the first half from a year ago, on stretched payment terms arising from the challenges of the pandemic.
Residential sales reservations rose 2 percent to P49.3 billion.