There are varying expert opinions about the matter, but just like the Filipino spirit, the dream of buying and owning a home remains to be stronger than the virus.
1. Accelerated digitalization
The real estate segment has been a relatively slow runner in keeping p with e-commerce. There is a human element in real estate that is essential in the buying process. However, more sellers have been forced to go digital especially during the three-month lockdown. Developers have also offered virtual 360-degree showrooms. Despite this, the human connection is much more valuable in terms of providing the right advice to buyers and sellers, to sift opportunities out of the muddle of information online.2. Property availabilities in expat/foreigner-occupied locations
The demand for condominium properties has slowed down in certain prime locations where there is a large concentration of expats, foreign workers in industries like Philippine Offshore Gaming Operators and foreigners who went back to their original countries due to COVID-19. Travel restrictions worldwide have also discouraged foreign travel and tourism. While reducing property prices may be a temporary solution to pick up the demand, experts are foreseeing foreigner arrivals from other thriving sectors like e-commerce, telecommunications, broadband services, and logistics or from expats that are exempted from travel ban restrictions. And as both local government units continue to roll out the national vaccination program, it is only time until interest to return back to the vibrancy of cities will return.3. A buyer’s market ripe in resale properties
For homebuyers who have long been preparing to buy a home and have reached their budget goals, now is the time to seize the opportunity to by a condo, house and lot, or townhouse for sale, especially in now-vacant prime locations (see #1). While most of the sellers are adopting a wait-and-see attitude before reducing the prices, the competition against resale properties in the market will definitely convince those who needed to get the properties off from their portfolios.4. Flexible payment options
Retaining existing buyers and tenants is key in a buyer’s market. This is because the opportunity costs and fixed costs of unsold units and vacancies outweigh the cost of offering flexibility options on property purchases and rental expenses. Landlords, for example, offer discounts from 5 to 13 percent for their existing tenants, or offer friendlier lease terms like grace periods or extended deadlines during lockdown periods, similar to what banks and major utilitiy companies do. On the other hand, developers are offering extended payment terms, affordable downpayment schemes, and even resort to offering waved reservation fees for early adopters. Developers are more strategic with their flexibility options towards preselling properties that are approaching turnover date and has not approached occupancy rate goals.5. Increase in residential property purchases in low-density locations
With the Philippines under the world’s longest lockdown and the ominous fact that COVID-19 is going to be a part of our daily lives, social distancing has never been more important. As such, families with kids are opting to purchase new homes in low-density locations such as the suburbs. Not only the fact that residential properties come with ample outdoor living spaces where kids can roam and play without feeling stuffy, most residential properties are located in bordered communities near Metro Manila where common outdoor spaces like parks, swimming pools, and pocket gardens are al fresco and are more expansive than residential communities in city centers. Families who live in residential communities in the suburbs are able to explore and still exercise social distancing with less fear of infection.6. Living spaces for a home office or homeroom
With much of the workforce have transitioned to a flexibility schedule or work-from-home setup, home seekers are either seeking to upgrade their current homes or are looking for a new home that has extra rooms for a comfortable home office. The need to separate work life from home life has never been more important for folks who wanted to achieve a work-life balance. But how will you do that in a 21 square meter, open-plan studio unit when you are also sharing it with the rest of the family members? Moreover, remote learning is also taking a toll on students, especially kids who need extracurricular and other physical, face-to-face activities that encourages social interaction with their peers. While it may take a while for kids to resume physical classes in school, recreating the experience at home with a dedicated homeroom allows kids to not only focus on schoolwork, but also separate school and home life.7. Indoor air quality standards
With the way how COVID-19 (and its variants) are spreading in enclosed areas, air quality is now an important criterion, especially for homebuyers seeking to invest in high-density residential communities such as condominium buildings. And because it is a buyer’s market, homeseekers are willing to search a little more and find residential properties that has great ventilation and filtration systems in place. Residential properties that are developed using naturally-breathing, low-carbon construction materials and/or architectural features that promote good air circulation, temperature, and filtration are very much favored as well. If eyeing older residential units, developers or property resellers offer to include ventilation and filtration improvements as part of the total contract or lease price.8. Sustainable design as must-have
Initially used as marketing buzzwords, sustainable design residential buildings are now becoming attractive to homebuyers because of its capabilities to save energy and consumption. Energy-efficient building and equipment utility systems, which are key elements of a net zero energy building, will also reflect in energy and utility bills, and even in home association costs. Also, residential properties built with sustainable design will also take into account measures in case of energy and water shortages. While not all residential buildings adopt a recycling system, the amount of plastic, paper, and carton waste from online shopping and takeouts incurred by staying at home requires a more responsible way of dealing with garbage. Choosing to buy a property with a proper waste and recycling system not only helps Mother Earth, it also helps other industries to recoup the costs wasted on packaging and shipping.9. Smart property management
With the “new normal,” property management needs to be “smarter.” When property management is a people-driven endeavor before pandemic, today property management outfits increased their budgets and costs in order to install and implement technological measures to be more efficient in managing properties while keeping staff and residents safe and secured. These technological measures also help reduce face-to-face interactions as staff (and even property owners) can monitor from gues reservation and management, building tenancy, to sanitation, airflow, and lighting. While technology will help run and scale property management operations, customer service is still key for developers when it comes to increasing or stabilizing the occupancy of their residential properties. Aside from ensuring that adherence to social distancing, health, and safety protocols in residential properties, property managers are expected to carry out exceptional customer service to residents and guests, and manage operational expenses, so the latter can see the value of their rental costs and home association dues.10. Influx of new residential properties in and nearby Metro Iloilo, Bacolod, and Davao
With the “new normal,” companies, especially in the Business Outsource Processing (BPO), are seeking to expand their operations in secondary cities such as Metro Iloilo, Bacolod, and Davao, in case their main operations in Metro Manila or Cebu decides to shut down due to a lockdown. One subsegment is being eyed on as another significant driver for growth in such cities — healthcare BPOs. While most companies in the Fortune 500 have largely stated away from secondary cities except for Cebu, the viability of Metro Iloilo, Bacolod, and Davao will certainly attract them (and other expanding industries) post 2021, thanks to the following criteria: Grade A office space, a large hospitality labor pool, scalable city infrastructure, and a secure environment.Bottom Line
While 2020 was a challenging year all over the world, 2021 was the year when the world tries to gain its momentum back. Although time will tell when the Philippine government will become successful in containing COVID-19 and its variants, industries like Philippine residential real estate have already chosen to adapt and thrive. Moreover, these residential trends observed are helping the entire real estate market, and industry as a whole, move forward towards a pre-pandemic recovery.Like What you've read?
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