How's the market?

In the first nine months of 2022, Ayala Land's sales reservations increased by 10% from 70.07 Bn in 9M2021 to 77.33 Bn in 9M2022. However, the pace of recovery slowed from +15% in 9M2021 to +10% in 9M2022.

Highlights:

- The pre-selling market is continuing to recover.

- Though, the recovery has slowed to +10% (9M2021 vs. 9M2022) from +15% (9M2020 vs. 9M2021).

- Ayala Land's sales reservations are still 28.7% down from its pre-pandemic (9M2019) figure.

Take-aways?

- Ayala Land's (the country's largest RE developer) sales reservations are an indicator of demand for pre-selling projects.

- The improvement between 9M2022 and 9M2021 shows that the demand continues to improve annually from the lows of the pandemic.

- I believe that for as long as pre-selling demand is on an uptrend, demand for newly turned-over properties in the secondary market should conversely be healthy.

- In other words, people wanting to flip units may continue to expect some profit.

- However, profit expectations should be managed since the market is still far from pre-pandemic figures–don't expect the double-digit profit seen before the pandemic.