Many experts are trying to figure out what impact COVID-19 will have on the Philippine property market. Luzon remains under enhanced community quarantine (ECQ) with the order now extended to April 30. It is also possible the ECQ is lengthened if the situation doesn’t not show signs of improvement.
Regardless of what happens, the real estate sector will be affected. However, some experts are optimistic that a Philippine property market rebound will happen once the situation improves. Prof. Enrique Soriano III, Executive Director of Wong+Bernstein Advisory Group, explained to the Inquirer that property is a resilient sector and the demand for housing is still much greater than supply.
“For the long term, I would still bet my last centavo on real estate. Real estate investing, when done right, will continue to be a local play for most investors. Unless you are a methodical stock market player, the risk is higher in capital markets as stock movements are heavily correlated to regional and global events,” Soriano said to the newspaper.
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Colliers International Philippines believes any potential Philippine property market rebound is dependent upon when normal business activities resume. The consultancy noted that should things return to normal by the second half of this year, pent-up demand and a low interest rate environment will drive the residential market forward. However, an extended disruption could put downward pressure on both demand and residential prices.
Acting before the Philippine property market rebound
The Philippine property market rebound won’t start until disruption from COVID-19 has passed, but real estate buyers with cash in hand may have more opportunities now than when the recovery has started.
“End-users and investors should now cash in on increased opportunities to negotiate better pricing for both pre-selling and secondary projects,” Joey Roi Bondoc, Senior Research Manager at Colliers International Philippines, wrote in the Inquirer. “Investors, young professionals and early nesters should explore condominium units in sub-markets where there is still potential for capital value appreciation and where previous price increases were influenced by strong end-user demand.”
In fact, buying now at a discounted price could prove to be a savvy decision. A recent report from JLL covering COVID-19’s influence on real estate investment pointed out that the long-term impact of the situation would be minimal.
“Although investment into real estate has fluctuated over the years through various downturns, the overall trend has been for higher allocations to real estate and we see no reason for this trend to reverse. Real estate continues to offer good relative returns in comparison to other asset classes and we have witnessed increased volatility in the equities and commodities markets,” the report found.