The year 2020 has been a rough year for all industries, and the real estate sector is no exception. Due to nationwide lockdowns, economic uncertainty, and health concerns brought by COVID-19, investors were compelled to reassess their priorities. But despite all the challenges brought by the new normal, it’s good to know that the real estate industry of the Philippines is still heading in the right direction.
Thanks to rapid urbanization, increasing opportunities, and the entry of exciting projects, both local and international players are starting to see the country’s potential as an economic and lifestyle hub. If you’re looking to purchase property during this period, you need to take note of how the latest trends are affecting the market.
6 Megatrends in Philippine Real Estate
To help you make the best investment possible, the guide below will discuss six major developments in real estate that you should be aware of.
1. Continuous rise of condominiums
Due to the ever-increasing demand for residential spaces, real estate companies also increased the supply of condo units. High-rise condos populate business districts and areas near Metro Manila to address the need for living spaces for young professionals and starting families.
Apart from creating more structures, real estate developers are finding ways to expand their infrastructures to accommodate more tenants. Nowadays, condominiums in Metro Manila’s central business districts (CBDs) can house over 200 to 700 units. This practice allows developers to maximize the land while giving home buyers more options to choose from.
2. Low residential construction level
As condos continue to gain more traction and the market shifts its focus, it’s only natural for real estate companies to adjust to this change in homebuyer behavior. Since their main priority is to create and sell units, the construction of houses and other forms of living will see a decline.
In the fourth quarter of 2019, the Philippine Statistics Authority reported that the number of residential construction projects shrunk by around 13.3% from the past year. While houses remain the most popular and preferred property type, this shift could eventually affect buyers’ preferences.
3. More residential rentals
Economic uncertainty has been a major concern for home buyers over the past year. Since COVID-19 struck unexpectedly, people have become more frugal and are looking for housing options that provide the most flexibility. Considering the convenience and affordability that they provide, the latest events have caused a surge in rentals.
Purchasing a house or condo may be a great choice, but it’s not ideal for those who are in a tough spot financially. While getting a loan may provide more breathing room, handling long-term debt along with other responsibilities can get very taxing. Since rentals aren’t a heavy commitment, people who choose to lease can seamlessly adjust through the years.
4. Loss of affordable housing options
CBDs such as Metro Manila are often perceived as the center of the country’s economy. Considering all the job opportunities that the areas provide, it’s no surprise that people from the provinces are looking to settle there. Now that the city is more congested than ever, the need for housing has also grown accordingly.
Taking these factors into consideration, the high demand for housing has led to significant price increases. Research shows that the number of condos in Makati CBD has risen by 132% from 2010 to 2018. While different factors such as inflation may have also exerted their influence, this suggests that there will be a loss of affordable housing options.
5. Increase in real estate taxes
Following the previous point, the increased demand for housing will have a ripple effect on taxes. With more people looking to live in the Metro, increased rates suggest that government fees will also become more expensive. As you search for your new home, you’ll need to take note of real property tax as an expense.
6. Demand for safety and security
When looking at different housing options, all homebuyers take safety into account. Aside from checking if a property has round-the-clock security or CCTV cameras installed, cleanliness is another factor under heavy consideration.
Since the country is still dealing with the effects of COVID-19, all real estate providers have made cleanliness and the well-being of tenants their top priorities. Apart from optimizing sanitation protocols, condos are now being redesigned to adapt to the new normal’s demands.
Your Dream Home is Waiting
Purchasing a property can be very overwhelming. Since it involves putting in a significant amount of money, it’s only right that you buy a home that will give you the most value. As you gather your list of prospects, being aware of the six trends above can help you shortlist options and set fair terms during negotiations.
In case you’re having trouble in your home buying process, don’t hesitate to ask for help. Contacting a real estate broker in the Philippines is the first step to finding the best properties with ease. Visit our site today for a free consultation!