Real Estate Resilience in the Time of COVID-19

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Lamudi’s Roundtable Series held on March 11, 2020, at the Makati Shangri-La, gathered real estate leaders to talk about the latest developments regarding the industry. The panel, moderated by Lamudi’s CEO Bhavna Suresh, opened by addressing the global concern, COVID-19, and its effects in real estate. 

The roundtable discussion titled “Insights from 2019 and Trends to Watch in 2020” tapped panelists Raphael Felix, Chief Executive Officer, PHINMA Property Holdings Corporation and Chairman, Subdivision and Housing Developers Association (SHDA); Catherine Ko, Executive Vice President, Federal Land, Inc. and President, Sunshine Fort North Bonifacio Realty Development Corp.; Joey Bondoc, Senior Manager for Research, Colliers International Philippines; and Lars Wittig, Country Manager Philippines, Vietnam, Cambodia, Thailand, S. Korea; SVP ASEAN, S.Korea, International Workplace Group. 

The event is in cooperation with the Subdivision and Housing Developers Association (SHDA) and in partnership with the International Workplace Group (IWG) and KONE. It is the real estate platform’s first roundtable discussion of 2020. 

COVID-19 as an Opportunity for Buyers and Investors 

Overall, leaders in the property sector have an optimistic view, with Ko saying there is not enough time to react just yet. After the recently announced community quarantine of Metro Manila, however, businesses have started to implement practices that will encourage social distancing but will not exactly put operations at a standstill. Ko mentions that part of their response to COVID-19 is to share information and help condo corps handle situations in case of suspected cases. 

Wittig adds the encouragement of companies to work from home or near home, to minimize the commute and therefore the risk of exposure to the virus. This set-up allows for greater business continuity. 

The challenge in production, according to Ko, is that “you cannot construct a house from your home.” 

Fortunately, real estate’s move online will be a benefit in this situation, particularly for buyers and investors. According to Felix, “Everything is digital. You have walkthroughs. You can view the unit.”  

Investing in Better Homes

The Philippines’ first two months into 2020 have been rough. In January, the Taal eruption turned the spotlight south of the metro, to CALABARZON. In February, the whole country stayed alert about the novel coronavirus. As the property market faced challenges in the popular tourist destination Tagaytay after the Taal eruption, and the panic in Metro Manila due to the SARS-COV-2 virus, the property market remains resilient, says industry leaders. 

“Home buying is something you plan for,” shares Felix. “It’s not like going out to a restaurant or buying a new shirt or buying a new car. It’s something you plan for well in advance. People have this in their mindset, they have it as an objective.”

The careful consideration property seekers look into before finalizing their home-buying journey may not necessarily be affected by calamities. Felix takes Davao as an example, with the earthquakes challenging the condo market, but “it didn’t last long.”

Property seekers are showing an interesting response to nature’s challenges, however. According to Felix, home buyers look into second homes as a “safe haven” to turn to. Though they are not looking to relocate and leave their homes in “danger zones,” they would consider having a second home when the time comes to evacuate. This, Felix says, is a better alternative to having to go to an evacuation center. 

Where to Turn for Investment Opportunities

The impact of the pandemic is largely felt in Metro Manila, where the majority of property seekers on Lamudi also come from. However, it’s not just seekers from Quezon City, Makati, and Taguig that show interest in real estate. Property seekers from other regions, particularly Cebu City and Davao City, are also in the top 10 in terms of where most seekers come from in the first two months of 2020. Bondoc mentions a slow-down in the hotel sector at the moment, but for residential, there is still room for investment, particularly in provincial cities.  

The panelists mentioned Cagayan de Oro as one to watch, with the next-wave city being on the brink of a real estate “explosion.” Lamudi data confirms that after Davao City, Cagayan de Oro is the most popular city in Mindanao in terms of pageviews. Though Davao City has four times the number of pageviews as Cagayan de Oro from January to March 10, 2020, CDO joins the list of places to watch for real estate investments, especially before property prices skyrocket. 

Wittig adds that in Visayas and Mindanao, money from agriculture and generations of accumulated wealth are being reinvested, which boosts the creation of jobs. Outside Luzon, the top cities for investment are Davao City in Mindanao and Cebu City in Visayas, but Iloilo and Cagayan de Oro are growing markets in their respective regions. According to Lamudi’s data for January to March 10, 2020, property seekers in Iloilo are in third place when it comes to real estate interest from Visayas, trailing after Bacolod in second place and Cebu City in first place. 

As a piece of advice to end users, Felix suggests looking for windows of opportunity during times of crisis. “Take it. Take the plunge. Buy it. Especially if you’re going to use it, you don’t lose.”

To end the roundtable, Suresh says, “Sometimes a crisis helps you drive a good bargain.” 

“Insights from 2019 and Trends to Watch in 2020” is the first of a series of The Outlook: Roundtable discussions to be held throughout the year. As a lead-up to The Outlook Awards, Lamudi opens the table for the discussion of the latest trends and developments in the industry to guide property seekers, investors, brokers, and developers in their path forward. For more information on the latest real estate trends and to know the schedule of The Outlook Awards, visit lamudi.com.ph/outlook2020.

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