March was supposed to herald in the symbolic Filipino spring. Spirits are usually high, with Lent approaching and sandy beaches beckon. But the coronavirus had other ideas. Here’s the impact that the extended quarantine has had on real estate.
No Slowdown Despite COVID-19
Going back to the success of the last quarter of 2019 until February 2020, Lamudi analyzed that the residential real estate market was “beyond stable” thanks to the property demands of POGO workers. Colliers reported that approximately, there are 390,000 condominium units that have been completed in Metro Manila alone. Thanks to the continuous demands of the foreign workers, it is expected that the price of these units will increase 5% annually starting this year until 2022.
Federal Land’s Executive Vice President, Catherine Ko, stated that the residential real estate market wasn’t badly affected by the outbreak. She stated that the buyers might hold off in purchasing the property, not abandon it altogether. This hypothesis arrives on the heels of the World Health Organization’s warning for citizens to stay vigilant on local transmissions of the virus.
PHINMA Property Holdings Corp. is similarly confident. PHINMA’s CEO, Raphael Felix, also stated that despite the outbreak back in early February, the company’s great streak of condo sales was still stable until today.
In essence, the market demand is still healthy. However, since the disease is spreading locally, developers have to hold off on construction for the safety of their employees, and also for their potential tenants.
The Show Goes On, But With Precautions
POGOs have aggressively acquired a number of condominium units to house their workers — but, as with most industries, a large percentage of POGO operations have ceased in an effort to staunch the spread of the disease. The main priority of the real estate sector is the safety of the employees; the growth of the market comes second. The residential sector is more than stable thanks to the successes of 2019.
In spite of the outbreak, the likes of Robinsons Land Corporation has recently completed a whopping ₱9.13 billion on its developed condo units in Metro Manila. Ever since 2018, the residential real estate sector of Robinson’s Land continues to grow in profit by 5% every quarter, thanks to the demands of foreign investors.
Ayala Corporation meanwhile has produced a total revenue of ₱7.6 billion in outlying provinces. Since the development of The Residences at Azuela Cove in Davao City, the company continues to receive leases from local and foreign investors who are planning to reside in Davao. It was expected that The Residences at Azuela Cove will finish in early 2022.
The opposite is happening to the United States this month, as the outbreak caused the fall of mortgage rates. Realtor.com stated that the Chinese were the highest investors in the country since 2018, where the residential sector of the United States produced a whopping $13.4 billion for 2 years.
Amidst the outbreak, the rates went down by 56% and the market was finding solutions on how to eradicate this situation — especially as their investors returned home to wait out the pandemic.
It appears the residential real estate sector is still healthy in spite of the pandemic — yet developers and lessors are wisely playing cautious, waiting to see what happens.
What is the fate of the Philippine residential real estate of this year? Will 2020 produce the same feat that has been outlooked last year? Stay updated with the residential real estate news by visiting https://housinginteractive.com.ph/