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Metro Manila, Philippines
In the past 3 years, real estate in the Philippines 2020 faced significant challenges due to the COVID-19 pandemic. The government implemented strict lockdown measures that affected the economy, including the real estate market. Despite these challenges, there were still opportunities for investors and developers to thrive.
One of the most significant impacts of the pandemic on the real estate market was the slowdown in construction and sales. Many construction projects were put on hold due to the quarantine measures, resulting in delays in completion and delivery. Additionally, potential buyers and renters were hesitant to make investments due to the economic uncertainty caused by the pandemic.
Real estate has already established its stability as an industry for years, considering that there is always a growing need for residential and commercial homes that people can utilize for themselves or their businesses. However, with the rapid rise of the pandemic two years ago came the insistence on staying at home, therefore causing either a massive increase or a decrease in certain aspects regarding real estate.
IN THIS ARTICLE:
The Effects of the Pandemic in the Philippine Context
The Philippine government decided to lay down the nationwide announcement for a lockdown feels too long ago as we watch the small to bigger efforts of the country to return back to what was considered as our ‘new normal’. All the safety precautions in every establishment are implemented along with the mandatory usage of masks, and the exercised security in making sure everyone complies with these restrictions; it is an effort to keep the safety between the people and also a showcase the camaraderie between Filipinos in taking others’ health into consideration as well. Achieving all these is a little too rocky along the way, but the process finally gave the Filipinos a little more taste of the normalcy we all once had.
However, considering that the Philippines is still under multiple health restrictions, the huge effect of the recent pandemic among the citizens is still highly evident despite the rapid cases and panic simmering down
One of the most recognized health restrictions during the heat of the pandemic is the high recommendation of pursuing a work-from-home setup for all those in the working class and online classes for the students. This is geared to what we have all seen and heard of as a sudden drop in jobs and business from most of the working class. There is really nothing much we can do when faced with a real health and safety risk until after getting tested and vaccinated, which were not really as accessible back in the late 2019s and early 2020s.
As the insistence on staying inside and being safe was louder then, it was inevitable that this decision greatly affected multiple businesses and companies, especially real estate. In the following section, let us know how these businesses got to get over their experienced losses as the effects of the pandemic soon wavered.
How Real Estate Businesses Flopped then Flourished
The pandemic and the formed quarantine restrictions created both a negative and a positive impact in the context of the real estate business. Leads, in technical terms and in the context of real estate business, are a name and contact details of a person that provided interest in working with agents or brokerage firms and websites. According to surveys and observations conducted by a trusted real estate website Lamudi, residential properties such as condominiums and commercial properties, all experienced a great decrease in their number of leads from the first half of the year 2020.
It is truly understandable, given that there is a strong uncertainty among the people regarding their own safety and there is barely a need for most to look for places to stay in as the remote setup does not require their presence on site. Those who are looking for residential properties, however, prefer to browse and perform a little waiting game to see which places are not as heavy for their accounts; a “wait and see” stance, as mentioned by Colliers International. This way the customers would be able to have more options and a wider range of prices for their desired properties.
Yet following these multiple losses for real estate businesses is a huge sweep upwards in the latter half of the year 2020. Reports on more pageviews for real estate websites began resurfacing, as well as the growth in demand for residential properties in major cities in the National Capital Region (NCR) such as Makati, San Juan (formerly San Juan del Monte), and Muntinlupa. Makati was recorded to reach 91% leads in land properties and 92% leads in housing.
San Juan gained 9% in leads, while Muntinlupa received a 7% increase, both for condominiums, foreclosures, houses, and land. One known reason for this would be the people’s desire to look for a larger living space in cities that are noticeably more urbanized and contain better accessibility to job opportunities, businesses, and entertainment.
Alongside the recorded growth of the three cities mentioned, Manila, Las Pinas, and Quezon City continue to keep their progress with their leads and pageviews, maintaining the demands in residential and commercial properties. Quezon City was even concluded to have stability when it comes to real estate investments.
Another result to include would be the decrease in renting properties yet the addition with the purchase listings of properties. This further thrives with the effect of the pandemic on Filipinos’ mindset; instead of checking a property that is pre-owned or a temporary replacement for their own houses, they prefer the idea of having something of their own and also being sure enough to protect themselves.
Why Real Estate Continues to Thrive in the Philippines Today
Real estate is a business transaction between different parties; the buyer, the seller, the agents, and the firms. Without just one of these, there will barely be a transaction happening, or if there is, there is some sort of inconsistency with the process. Figure out why this kind of business is successful nowadays, there are actually multiple reasons that could emerge according to KW Philippines, an internationally known real estate franchise that established its expansion here in the Philippines.
Population
The first on the list would be the ever-so-present growth of the Philippine population; with the rapid increase in population also comes the boost in demand for residency and jobs. The aforementioned cities fulfill their part in this demand, however, Manila holds the most opportunities for people and real estate which businesses take advantage of.
Young Generation
The Philippines’ current generation nowadays is considered to contain the largest number of young people with a median age of 26.3. This is parallel with the idea that people around this age range are either looking for properties that they can use for their families, be it with their parents or their own, their built and established businesses, or simply just for themselves when they want to have their independent lives and start with their own places.
Tourism
The country contains so many places that attract heaps of tourists either locally or from foreign countries. Aside from the temporary places that these tourists look for when they need to stay in, some are also fascinated and captivated enough by the Philippines and the hospitable people living within that they consider staying a little longer or even permanently. This gives a significant boost to the real estate business that is happening within certain locations in the country.
Great Business Location
The great government support for the real estate industry here in the Philippines is a good factor as to why businesses are often built and welcomed. There are so many opportunities for growth, especially when the Philippines have already been in contact with multiple foreign investors already. The stability of the market and the country for businesses is what makes them thrive and earn investments for real estate as well as commercial usage.
Foreign Investors
In connection to the former paragraph, the high encouragement from the Philippines regarding foreign connections made business processing and foreign investment in real estate easier and much more accessible. This brought the influx of investments in real estate markets as the idea of tax breaks and reduced licensing fees seemed to be a little bit more attractive to foreign investors’ eyes than they let on.
The beauty of the Country
This might seem a bit general, but there is nothing much more attractive to people than those that are natural. In this case, the Philippines has them all. From the beauty and abundance of natural resources to the vibrant structures and the community built within the country; all these qualities add up to the appeal of the country to tourists and businesses, therefore, increasing more chances to bag investments upon investments.
Rapid Growth
With all the aforementioned reasons, the most natural conclusion is that the Philippine economy is growing, and rapidly at that. With tourists, businesses, and investors making their way through the economic chain within the country, there would also be a continuous increase in residencies and business expansions. As this continues, so does the progress in the country’s real estate businesses and investments.
All in all, real estate businesses in the Philippines might have faced a hard time during the height of the pandemic, but it’s never denying the ability to improve and take back what was lost through the continuous improvement of the country’s economic situation and foreign connections.
Read more: 7 Formidable and Legitimate Real Estate Property Websites in the Philippines
