2019 and 2020 were difficult times in the economy, and it didn’t spare the Real Estate industry, putting the housing market into a deep freeze. The number of people asking lenders for more time on their mortgage payments surged as the global recession hit.
The fear was that house prices would collapse, as they reliably had done in past economic downturns. An increase in bankruptcies and unemployment would squeeze disposable incomes and make it difficult for highly indebted homeowners to keep up with their mortgages.
Quite true enough, Real Estate industry in Manila has turned into a buyer’s market. A bare one bedroom condo for rent in Bonifacio Global City (BGC), a Central Business District, was offered for as low as PHP20,000, from what was initially a PHP30,000 rental.
The unexpected twist in Real Estate industry
With so much opportunities at hand, homebuyers and investors who were first hesitant to invest have actually started buying. Many people felt that because the economy was tanking they would get good deals.
In an unexpected twist, the pandemic benefited the Real Estate market.
That's because aside from government providing support through loans for workers and businesses, Interest rate cuts kept mortgage repayments affordable in many places, while temporary reductions to purchase taxes in some markets spurred home buying.
In an Earthauz podcast called Behind the Listing, a Real Estate Broker recalled that you can get a Condo for Sale in Manila for as low as 0% Downpayment. These measures cushioned the housing market from the coronavirus recession.
The boom of properties outside the Metro
As people were forced to transform houses into offices and classrooms, it didn't take long for a "race for space" to take hold.
Wealthier individuals were in search for larger suburban homes with more outdoor space in the anticipation that they won't need to commute into central offices as much even after the pandemic ends, noting that the ‘work from home’ setup is here to stay. Many of them are financially in a better position than they were before the pandemic hit, since they've spent less on vacations and eating out, and can therefore spend more on house purchases.
In the first episode of Behind the Listing, Brokers mentioned that the new trend is to search for properties outside Metro Manila, noting the boom of Real Estate properties for Sale in Laguna and Pampanga.
Panic buying of Real Estate properties
Global economic growth is projected to be much stronger this year, as vaccines are rolled out and lockdown restrictions ease, which will be supportive of housing markets.
Historically, periods of weak house prices have been triggered by rising interest rates, and now that interest rates and pre-selling offers from developers remain low, people will continue to grab this once-in-a-lifetime opportunity of investing in really good Real Estate deals.
So here’s a tip from Earthauz Real Estate Professionals –
As the economy starts to bounce back, Real Estate industry will be among the first ones to also go back to normal, and by normal we mean competitive prices from a seller’s market. So before this happens, talk to the Earthauz team today and we can advise you of property listings available for your budget.