The real estate market in the Philippines is rising, making it a promising investment option for local and foreign investors. The Philippines is a Southeast Asian country with an increasing middle class and favorable demographics. Real estate companies from many countries have established offices in the Philippines, especially in places like Cebu and Davao, where they can easily streamline business operations and increase returns on investments (ROIs).
In today’s Blog, we will discuss the real estate market in the Philippines. Read on! The Real Estate Market in 2021 According to Global Property Guide, the Covid-19 pandemic has hit hard the real estate market in the Philippines. However, Asia Property HQ reports that real estate businesses make substantial efforts to recover from losses in 2021. Although real estate prices have decreased significantly, people also experience reduced lease rates. Therefore, the Philippines is one of the best destinations for foreign investors who want to get the most out of their real estate companies. The country experienced a real estate price boom between 2010 and 2018. The housing prices increased by 132% due to boosted economic growth and strong consumer demand. However, the real estate market slowed down in 2020 due to the US-China trade war. That’s why actual house prices fell by 1%. The Covid-19 pandemic also disrupted the recovery process in 2020.
However, things are getting back on track in 2021, thanks to mass vaccination efforts. In 2021, vacancy rates will increase from 5.5% to 7%, and lease rates will decrease to 17%, especially in Metro Manila. Quezon City North, Pasig City, the Bay Area, and Manila North may experience an oversupply of units, leading to challenges for the condominium sector. Although the situation will remain stable in 2021, real estate businesses will face some difficulties. Developers make efforts to assist the condominium market in 2021 by offering flexible conditions to homebuyers. The primary reason behind this is a low mortgage and interest rates. The Philippines Real Estate Market Trends in 2021 How will the Covid-19 pandemic’s effects loom over the real estate market in 2021?
Compared to other real estate sectors, the residential real estate market may see efficient and reorganized business operations in 2021 because owning houses births from necessity, given that homebuyers have the liquidity to match this. In this section, we will discuss some trends that the real estate market will experience in 2021. Continue reading! Developers and Landlords Offer Flexibility Property owners in the Philippines must retain existing buyers and tenants. Many developers and landlords offer extended payment terms, waived reservation feeds, and light down payment schemes, allowing financially prepared buyers to take benefit from these opportunities. Research shows that many landlords offer substantial discounts that range from 5% to 13% for existing tenants.
Likewise, some landlords offer friendlier payment terms in parallel with the grace period by banks during the Covid-19 pandemic. The purpose is to optimize business operations during the lockdown. The Resale Market Listings are increasing The increasing number of resale options available in the real estate market will benefit homebuyers because they find themselves better positioned to look for attractive financial opportunities.
Although many property sellers are on a wait-and-see mode before making informed decisions to adjust prices, those who prioritize liquidating within the short term of 2-3 years must focus on research and prices. On the other hand, liquid buyers will encounter fewer investment opportunities in 2021. However, if they conduct thorough research and seek professional real estate help, they can overcome difficulties. Real Estate Market Digitization Although the real estate market in the Philippines faces challenges in keeping with ecommerce, many businesses have implemented digital strategies to streamline the buying and selling processes. There is a human element in the housing market, which is essential in the buying and selling process.
However, the Covid-19 pandemic has forced sellers to go digital to prevent the repercussions of unpredictable lockdowns and optimize business operations. Developers also offer virtual 360 degrees showrooms.
While digitization is essential amid the Covid-19 pandemic, the human connection is still more valuable when it comes to providing the right advice to sellers and buyers. Final Words
The real estate market in the Philippines has been hit hard by the Covid-19 pandemic. However, there is still a wide range of opportunities for buyers and sellers to cope with the situation and maintain their business operations. It is crucial to focus on the trends mentioned above to ensure your real estate business overcomes challenges in 2021.