Despite the impact of the coronavirus outbreak, real estate interest in the country has not waned, with overseas interest continuing to come in, and property seekers looking into provincial cities, a recent report by Lamudi and Colliers showed.
With stay-at-home orders relaxed in the second half of August, businesses in Metro Manila and affected areas in Luzon have resumed, and residents now move more freely.
Lamudi looked at where the market was headed in 2019, and how changes in 2020 disrupted or sustained real estate investment trends. Colliers Philippines listed recommendations for opportunities outside Metro Manila.
The past year and a half (January 2019 – July 2020) registered a variety of changes in the residential market trends, especially in Metro Manila and the surrounding regions. With the uncertainties heralded by the pandemic, real estate transactions experienced a slowdown in various stages of completion, and property developers and sellers worked together to revive the market through contactless initiatives and more flexible payment options.
Beyond fences
Overseas interest in properties in the Philippines remained fairly consistent from the first half of 2019 through the first half of 2020. Data from Lamudi showed that the United States — the country where the highest number of Filipino OFWs are concentrated, according to Migration Policy Institute — accounted for the most overseas page views and leads from the first half of 2019 to the first half of 2020.
Four other countries and a region contributed to overseas interest: the Middle East (Dubai, Doha, Abu Dhabi, and Riyadh Province), Canada (Ontario, Alberta, and British Columbia), England, Australia (New South Wales, Victoria, and Queensland), and Japan (Tokyo).
Interest in provincial cities growing
Provincial cities enjoy preference over most Metro Manila cities (particularly those with large central business districts). Provincial cities near Metro Manila recorded the greatest jumps in interest for both page views and leads on Lamudi from the last six months of 2019 to the first six of 2020.
A trend observed from the top provincial cities is that seekers interested in properties in these areas are more active in viewing and making inquiries. The growth in leads from the first half of 2019 to the first half of 2020 is also much larger than the growth in page views. Calamba (37.34%), General Trias (30.45%), Santa Rosa (27.22%), and Lipa (26.87%) registered the highest change in leads, pointing to high property seeker interest in these areas — likely due to their close proximity to Metro Manila and relatively low property prices. The move towards provincial cities, fueled in part by lower population levels, fewer COVID-19 cases, and relaxed lockdowns, may continue in the near to medium term.
While the growth in interest in Metro Manila properties was outpaced by the growth shown in provincial cities, Valenzuela, Marikina, Pateros, and Caloocan showed positive growth for both page views and leads. These cities are located on the fringes of Metro Manila.
Preference for more outdoor and indoor space
Amenities that have remained important for property seekers in the past year and a half are related to leisure and comfort. Amenities important for physical activity (swimming pools and gyms) have always enjoyed popularity, regardless of the current changes in the environment brought by nationwide lockdowns.
And with many working professionals currently working from home, air conditioning and stable Internet connectivity remain important features and make homes not only more comfortable but also more conducive for work.
From the first half of 2019 to the same period in 2020, there was an increase in searches for garages (from 5 to 6%) and built-in wardrobes (from 4 to 5%), suggesting that property seekers are satisfying either or both of these qualities in 2020.
The lockdowns for the first half of 2020 have led to notable searches related to the outdoors (12.34%), upscale interiors (11.36%), security (10.25%), and vehicle storage (8.58%), pointing to property seekers wanting a home that offers not only shelter and security, but also a boost to their wellness and well-being.
Growth drivers outside Metro Manila
Colliers asserted a strong recovery happening in 2021 in real estate markets outside the capital region. As vertical, horizontal, and mixed-use developments dot key areas in Metro Manila as well as provincial cities, it is important that developers recapture the interest of the market with their changing preferences considered:
Mid-income projects
In Cebu, condominium projects priced between P3.2 million to 6 million have currently been the most popular, according to Colliers’ report Cebu Residential Q1 2020. The rising buying power of Cebuano investors and end-users is likely to remain resilient in the next coming years, as developers are urged to offer flexible lease terms supporting the low loan rates.
The mid-income segment is expected to enjoy renewed interest in Davao as well. The affordable projects have also been attracting property seekers, and are likely to be more in demand as the economy recovers and low mortgage rates become easily accessible.New residential market trends
Despite natural calamities, pandemics, restrictions on mobility, and the economic uncertainties that followed, property seekers are still active in the residential market, which bodes well for the market’s health and its performance in the near and medium-term.
As the Philippines restarts its real estate activities and international markets gradually reopen, the report observed that it is only a matter of time before the ‘new normal’ becomes the standard.