Based on global forecasts, despite the economic slowdown in 2020, a faster recovery may be anticipated in 2021. In the Philippines though, it’s quite optimistic given that the GDP per capita is continuously increasing providing people a greater ability to purchase properties.
The GDP growth rate of regions is also sustained, even outpacing that of the NCR, which speaks of the purchasing power of those in Central Luzon, Calabarzon, and VisMin. Although a decrease in OFW remittances is expected in 2020, other factors such as lending rates remaining low, propping up spending will encourage demand for property.
With these considerations, developers may jump back sooner than anticipated despite all the challenges that the pandemic brings to the industry.
The current programs and infrastructure projects of the Philippine government are seen to promote the movement of the population out of NCR and stimulate inclusive growth in the provinces.
Key initiatives such as the Balik-Probinsya Program, and Build, Build, Build which will now see the rise of infrastructure projects — NLEX-SLEX Connector, Skyway Stage 3, SLEX – Skyway Extension, TPLEX Extension, Manila – Clark Railway, Central Luzon Link Expressway, SLEX TR-4, Cebu Monorail, Cebu Bus Rapid Transit, Cebu – Cordova Expressway, Metro-Cebu Expressway– all point to opportunities in areas like Central Luzon, South Luzon, and Cebu, and are key indicators that will help dictate the strategy of real estate developers.
A glimpse of the local property market also shows that the price of real estate is on a sustained rate despite a drop in demand for condominiums, specifically in Metro Manila. On the other hand, demand for horizontal developments consistently outpaces the supply. This is especially true in terms of houses and lots being offered in key cities such as Cebu in Visayas and Pampanga, Cavite, Laguna, and Batangas in Luzon.
Even as there is a slowdown in takeup after the community quarantine, the pent-up demand should help propel takeup as the market recovers post-pandemic.
Bondoc also offered recommendations so developers can regain lost momentum post-COVID. These include extending more flexible terms for buyers, implementing creative leasing schemes, and ensuring buildings are adaptable to modern technology.
In addition, the importance of good property management can never be overstated, as it is crucial to the health and safety of residents. Finally, developers should proactively touch base with their clients to recapture the demand once the situation normalizes.
For buyers, Bondoc recommends that this is now an opportune time to negotiate for better deals and take advantage of the low mortgage rates. Notably, buyers should consider communities within integrated communities.
The pandemic has paved the way for shifts in preferences in residential properties after a few months of lockdown. One of these is an increase in demand for properties outside of the CBDs, and outside of NCR.
There is also a higher demand for houses and lots, particularly developments that are less dense and feature more open spaces. The trends also point to a shift in preference towards integrated communities for the convenient way of life that they offer.
Bondoc concluded that the economic recovery that is foreseen to take place in 2021 will help anchor the growth of property demand in the Philippines. The government’s infrastructure program and initiatives such as the Balik Probinsya program will promote inclusive growth in the provinces, help buyers and developers alike determine where to invest in the future, and finally, help restore confidence in the Philippine property sector in the coming months.
Watch out for the second episode of AboitizLand Webcasts on June 11, to be aired live in the AboitizLand Facebook page.
In this next episode, Jason Buensalido, Chief Design Ambassador and Principal Architect for Buensalido + Architects, will talk about innovative house designs that allow communities to thrive even during a pandemic.