Property buyers looking for a bargain may be in luck as experts believe many developers will launch attractive discount programs and price reductions for condo units. The move is necessary for homebuilders to clear unsold inventory and start selling units in the aftermath of the COVID-19 pandemic.
Residential condo prices could decline by as much as 15 to 20 percent this year as firms look to get the market moving after months of inactivity. According to Januarius Holdings Inc. Chairman and Chief Executive Januario Jesus Atencio, end-users and investors will have the opportunity to secure condos at lower prices than in the past.
“I wouldn’t be surprised if there is a 15 to 20-percent decrease in sale prices or sales volumes. These price drops will manifest themselves in many ways: straight discounts, sales promotions, freebies, add-ons, better customer service etc. It’s going to be about getting market share, not so much maximizing profitability,” Atencio was quoted as saying by the Inquirer.
Interest rates have been slashed by Bangko Sentral ng Pilipinas, but it may take a while for this to benefit the property market.
“In the Philippines, the Bangko Sentral ng Pilipinas has made certain monetary policy moves so we just have to wait for the banks to act on it in terms of lowering interest rates,” Atencio stated. “But the thing is, we are in a lockdown so even with low interest rates, how can you spend money for your business when you are not going to work?”
Real estate activities have been allowed to resume in some parts of the country with property leasing, buying, selling, subdividing and appraising all permitted. However, the full scope of the market won’t be known until business returns to normal in the coming months.
Many experts agree that a buyer’s market is likely to take shape and in some segments it has already begun to be realized. Lobien Realty Group noted that prices for homes on the secondary market have already dropped because some property owners wanted to dispose their assets for liquidity.
Developers have already begun to launch discount and price reduction programs for some projects. Any decline in condo prices will be short lived with Colliers International predicting that residential values will start to recover in 2021.