If there is one thing the novel coronavirus pandemic taught realtors and investors, it’s that you can never be too cautious about your investments. No one thought we would be stuck in our homes for months due to community-wide and nationwide restrictions. The accessibility of necessities like food, shelter, healthcare, employment, and education became top priority over facilities and luxury.
Since the beginning of the pandemic, there has been an oversupply of units in Metro Manila, mainly in Manila North, the Bay Area, Pasig City, and Quezon City North. The demand for residential units saw a steady decline in the first half of 2020 due to worries concerning the virus.
However, buyers eventually found confidence by the latter half of the year, which is also thanks to the influx of money from overseas Filipino workers in December. That trend continues in 2021, as real estate properties recover from the losses last year.
The Philippine Central Bank expects a 7.8% growth in the industry this year, as multinational companies begin to establish offices in the regions such as Cebu and Davao. Although Metro Manila vacancy rates are still expected to increase from 5.5 to 7%, these will reduce lease rates by up to 17% in the area, paving the way for local and foreign BPO companies to put up their bases there.
On the contrary, the demand for provincial business hubs is expected to rise this year, creating job opportunities and economic advancement in the region. Some of these Next Wave cities include Baguio City, Dagupan City, Malolos City, Sta. Rosa City, Taytay, Rizal, and Lipa City. There is currently an 18% vacancy rate of office spaces across regional business hubs in the country.
5 Vital Factors in Real Estate this 2021
In the residential sector, buyers looking for properties may want to check this short list of crucial factors in this new normal setup. If you are new in the business, then here are some tips for first-time property investors.
Price is still the top concern, obviously, and the pandemic slightly ‘helped’ keep rates low for more than a year now. However, determined to bounce back from their losses last year, several real estate companies now offer better deals with lower interest rates to attract buyers.
However, that golden window will soon close with vaccine roll-outs continuing and the government planning to resume activities pre-pandemic. Prospective buyers should make their decisions sooner rather than later.
There has been an increase in foreclosed properties over the past year, as thousands of families lost their jobs and businesses in the pandemic, unable to pay off both rent and upkeep. Investors may want to take advantage of these properties while they are still available to have a head start once the economy completely recovers.
When COVID-19 hit the country and restrictions were implemented, a property’s location became its most important asset. Expensive properties in the cities, especially within Metro Manila, were more affected than the more affordable ones in the provinces, where the effects of the pandemic are minimal or not as worse.
This paved the way for some businesses to move away from the Metro and to the nearby provinces such as Laguna, Bulacan, and Cavite. In fact, some companies moved away from the island itself and transferred to either the Cebu or Davao business districts. It’s only a matter of time before other companies flock to other developing cities, away from Metro Manila.
Accessibility to necessities became very important, especially in residential spaces. Food and parcel delivery services reached their peak last year as a result of the restrictions. Filipinos nowadays are looking for residential properties near the metropolitan area, but not necessarily within it, as they also want to avoid certain inconveniences.
Basic business establishments such as a wet and dry market, a city mall, public and private hospitals, and schools should only be within a few kilometers from home.
4. Outdoor Space
As more people needed to study or work at home, the need for sufficient outdoor space also became vital. Single-detached units became a popular search item in real property websites, which meant consumers still want to go outdoors without the risk of contracting the virus.
Outdoor space also disrupts the mundane day-to-day tasks in a work or study-from-home setup and is an ideal area for relaxation or exercise for those used to working out or going to the gym pre-pandemic.
5. Indoor Space to Work from Home
To cap off this list, we would look at the growing importance of having sufficient indoor space to have a comfortable work-from-home arrangement. Spending an entire day in a cramped or noisy space will not work anymore, especially if that will be the case for at least 261 days a year.
Insufficient indoor space became a problem for families living in small apartments during the pandemic when working from home became the norm. Anyone needs ample space to organize work or study tools, exercise, and have peace and privacy whenever they are working.
The real estate sector will eventually recover from last year’s woes, but if there’s one thing the pandemic brought on a positive note, it is to open more real estate opportunities outside Metro Manila, in smaller provincial business districts. In doing so, it also opened the possibility of boosting both the real estate and the tourism industry throughout the country.
Right now, investors and prospective buyers should do the right thing and make the first move while the golden window is still open. The Philippine economy is poised to make a strong comeback, thanks to an average population age of 25 years old.
Young, educated, and dynamic consumers, this group will also become the backbone of the country’s labor force in decades to come. But this bunch of energetic professionals will need places to stay, work from, and play in. When real estate companies provide those needs, it can be a win-win for everyone.