The first half of 2020 has been eventful for the Philippines. The coronavirus outbreak proved to have the largest impact on the country and its people’s movements and plans. With stay-at-home orders relaxed in the second half of August, businesses in Metro Manila and affected areas in Luzon can resume, and residents can move more freely.
In this trend report, Lamudi looks at where the market was headed in 2019, and how changes in 2020 disrupted or sustained real estate investment trends. In addition, Colliers Philippines lists recommendations for opportunities outside Metro Manila.
Significant and consistent overseas interest
Amid the pandemic, real estate interest has not waned, with overseas interest continuing to pour in, and property seekers looking into provincial cities. Meanwhile, overseas interest in properties in the Philippines remained fairly consistent from the first half of 2019 through the first half of 2020. Data from Lamudi shows that the United States — the country where the highest number of Filipino OFWs are concentrated, according to Migration Policy Institute — accounted for the most overseas pageviews and leads on Lamudi from the first half of 2019 to the first half of 2020.
Broken down further, Lamudi’s pageviews from the U.S. came from these states:
- New York
- New Jersey
Interest in provincial cities growing
Provincial cities near Metro Manila recorded the greatest jumps in interest for both pageviews and leads on Lamudi from the last six months of 2019 to the first six of 2020.
Calamba, General Trias, Santa Rosa, and Lipa registered the highest change in leads, pointing to high property seeker interest in these areas — likely due to their close proximity to Metro Manila and relatively low property prices. The move towards provincial cities, fueled in part by lower population levels, fewer COVID-19 cases, and relaxed lockdowns, may continue in the near to medium term.
Shift to work-at-home calls for more outdoor and indoor space
The lockdowns for the first half of 2020 have led to notable searches related to the outdoors, upscale interiors, security, and vehicle storage, pointing to property seekers wanting a home that offers not only shelter and security, but also a boost to their wellness and well-being.
Interest in vacant land growing
Interest in vacant land has steadily increased from the beginning of 2019 through the first half of 2020. This suggests that property seekers are not only looking for turnkey housing solutions (in the form of house and lot), but they are also willing to invest in property requiring development in the future.
Colliers Reveals Drivers of Growth Outside Metro Manila
Top property consultancy firm Colliers has asserted a strong recovery happening in 2021 in real estate markets outside the capital region. As vertical, horizontal, and mixed-use developments dot key areas in Metro Manila as well as provincial cities, it is important that developers recapture the interest of the market with their changing preferences considered:
The rising buying power of Cebuano investors and end-users is likely to remain resilient in the next coming years, as developers are urged to offer flexible lease terms supporting the low loan rates. The mid-income segment is expected to enjoy renewed interest in Davao as well.
Comfort and convenience preference
Property seekers are on the lookout for amenities that increase their level of comfort and convenience. Among Colliers’ key insights is the strong interest for integrated features, such as greater accessibility to essential goods and services.
In the same way, residential projects near planned infrastructure developments will be in demand even beyond the pandemic, according to the experts.
Proactive property management
Aside from comfort, health and safety have become priorities as well, given the times. Based on Colliers’ Cebu Residential Q1 2020 report, sanitation and emergency preparedness are among the top considerations of property seekers, which require more from property management personnel.
Appetite for house and lot projects
In Colliers’ Davao Residential 2020 report, 2019 data shows horizontal projects are particularly attractive among overseas Filipino workers (OFWs), and will likely remain resilient. Those who are in the city’s outskirts will sustain the investment activity in house and lot developments.
Despite natural calamities, pandemics, restrictions on mobility, and the economic uncertainties that followed, property seekers are still active in the residential market, which bodes well for the market’s health and its performance in the near and medium term.
In summary, here’s what we have learned:
- Overseas interest in Philippine properties is still significant, with most pageviews and leads stemming from the North American region (U.S. and Canada).
- Property seekers are switching their focus to provincial cities, with the areas surrounding Metro Manila enjoying particularly high interest and activity.
- Outside Luzon, Cebu and Davao are among the prime hotspots, expected to see demand recovery by 2021.
- The kinds of amenities property seekers value have remained relatively stable and focused around comfort, connectivity, and active leisure.
- An overall look at the past year and a half reveals consistent interest in house and lots compared to other residential property types. Overseas Filipino workers (OFWs) may fuel the demand for horizontal projects, at least in real estate markets outside the capital region, including Davao.
- The high potential of vacant lots makes them one of the versatile real estate investment options amid a crisis.
As the Philippines restarts its real estate activities and international markets gradually reopen, it is only a matter of time before the ‘new normal’ becomes the standard. The preference changes observed in 2019 have guided real estate players in making their decisions for 2020, but with the pandemic halting construction and development plans earlier in the year, there is room to realign with the new trends and priorities observed in the first half of 2020.