The steady growth of real estate in the Philippines has been evident in the past years. One of the reasons why the Philippine real estate sector is thriving is due to the country’s robust economy.
As the Philippines falls into recession due to the ongoing crisis caused by the pandemic, how will it affect the different markets in the real estate sector?
Due to the uncertainty brought by COVID-19 as well as the global economic crisis, buyers are reluctant to purchase a residential property, which results in a decline in the housing market.
However, despite these setbacks, the residential market perceived to be resilient over the medium to long term, according to the executive director of Wong+Bernstein Advisory, Enrique Soriano III.
As the whole world ventures into the new normal, developers are urged to highlight their preparedness, safety, and sanitation measures in case of another virus outbreak.
Convenience is another factor that should be highlighted, especially in the townships and integrated lifestyle communities, as this will be something that buyers will consider now.
Environmentally conscious developments with green, open spaces will be more attractive to the buyers who prefer house-and-lot properties in a low-density area.
While Metro Manila remains to be the prime residential market, the best of both world developments outside Metro Manila will also be in demand as it offers sustainable features in a suburban community while addressing the modern conveniences of the people.
The office market has also slowed down because of the impact of COVID-19. Among the hardest-hit industries in this market are the top demand drivers – POGO and BPOs, which comprise 36% and 30% of the supply in the office market, respectively.
The expansion of POGO was due to the travel ban and community quarantine that resulted in USD 0.8 billion decline. BPOs might move into emerging provincial hubs with competitive rental rates and lower labor costs.
The new normal also calls for demand in flexible/serviced offices and townships. Serviced offices are sought-after because of its flexible terms and payment, variety of working space depending on your need, collaborative community, and pay-as-you-go services, that’s perfect for entrepreneurs and start-up companies.
Townships also become an in-demand location for offices because of their residential and commercial features that are ideal for employees and employers who want to live near their work.
Among these property markets, retail is the most affected one. With the implementation of community quarantine, the demand for essential businesses increases, while non-essential businesses cope with sales revenue loss.
Online shopping will certainly thrive in the retail industry, as many are still reluctant to go outside to purchase goods. In addition to that, the convenience of online shopping is the main reason it is sought after during this time.
Once things slowly go back to normal, there is no doubt that real estate will recover from the aftermath of the pandemic. The high demand and low-interest rates are some of the determining factors that real estate is picking up its pace. After all, real estate is relatively known as a safe investment because of its resiliency under any market conditions.
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