The Impact of COVID-19 on the Real Estate Market in the Philippines

The Philippine real estate industry is among the best in the world. Apart from the local investors, meaning, the Filipinos, few of the biggest investors to this industry in the country are people from mainland China, Southeast Asians, and of course the Westerners. With the threat of COVID-19 around the globe, how has this affected the local real estate market?

The Philippine Real Estate Industry

Philippine Star’s Mary Ann Reyes wrote, “Several developers have focused on incorporating green architecture in their developments, due to an increase in temperature and carbon emissions and to facilitate natural lighting and ventilation utilizing renewable energy.”

These are only among the recent developments that real estate developers and owners are placing in these homes. Yet, the pandemic is changing the way the world economy moves.

However, with the continuous impact of the deepening COVID-19 crisis, the real estate market is also being affected. Data from Global Property Guide revealed that the housing market will slow down this year, since potential buyers are expected to take on a different approach, the “wait-and-see” strategy, out of the health crisis. No one can blame them since, at the end of the day, great caution when investing is the best choice.

The Global Pandemic

The COVID-19 pandemic is affecting about 2.6 billion people, combined figures from deaths, infections, and recovered. This includes individuals under the lockdown and quarantine measures from the government. The impact in the worldwide economy cannot be denied, especially that people are advised to stay at home, offices, and shops. Under the “new normal,” the real estate sector isn’t spared.

News reports even say that it might take a year or two before businesses in the Philippines can recover. In the real estate market, the changes in the trends are already evident. For instance, the demand for online real estate shopping continues, but because of the work break, the scrutiny and inspection of these living spaces have come to a halt. In general, the demand for these real estate establishments is also being affected negatively.

Paying Rent

Part of managing real estate investments in paying rent. This is in part of the business owners who manage stalls in these condominium buildings, and unit owners who own spaces. The pandemic, coupled with the global meltdown has urged businesses to close down offices, and thus, it is more difficult to make these rental payments. Many individuals have submitted letters to landlords requesting waivers in their account, in lieu of the recent crisis. The responses are mixed.

The disease is adding a burden to the current status of the Philippine economy. While it remains lucrative for investors to pool in their investments, they know that the country’s economy is still, generally, risky. Widespread corruption is present, affecting stability.

In 2019, the economic growth of this Southeast Asian nation submerged to an eight-year low at 5.9 percent, after achieving 6.2 percent in 2018. The figures point back to the implementation of that year’s national budget and the impacts of the trade war between China and the United States. The International Monetary Fund is predicting a 6.3 percent growth rate for the Philippines in 2020, but the parties are yet to see.

In the country, the real estate industry is classified into condominiums, single-detached and attached houses, duplex houses, and townhouses.