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Pandemic hits the Philippines hard but country will bounce back in 2021
By Juwai, 24 November 2020
Our latest survey report reveals real estate prices will be more favourable in 2022 and foreign buyers will drive future transactions.
Property Survey and Index Philippines Q4 2020 is the first industry report based on widespread sources to track the impact of COVID-19 the real estate sector in the Philippines. It provides an overall view of industry expectations for prices, rentals, and market activity as well as insights and data that aim to bring transparency to what can sometimes be an opaque market. The Index provides information that any buyer, seller, or developer would find useful and invaluable.
Here are some highlights from the report:
The pandemic has severely impacted GDP growth which is estimated to contract by -7.3% but the country is expected to bounce back to 6.5% growth in 2021.
Manila will see weaker prices and rents forecast in the coming 24 months than the national trend.
The average consensus amongst surveyed real estate agents is that national residential prices will climb 3.2% over the coming 12 months, while prices in Makati City are set to decline by -2.3% during the same period.
Real estate prices will be more favourable in 2022 with prices forecast to 16.9% by Q4 2022 on a national level. In Makati City, prices are forecast to rise by 14.8% during the same period.
Nationally, rents are expected to climb 1.9% in the next 12 months and by 13.2% over the next two years. Agents forecast that Makati City rents will decline by -6.6% over the next year before logging a 12.3% increase in 24 months.
Local investors and foreign buyers are the dominant buyer group accounting for 27% of national residential pre-sales acquisitions. In Makati City, investors account for 30% of all buyers in this segment — the highest of any buyer group.
Twenty-five per cent of industry respondents report future transaction growth is likely to come from foreign buyers with those from greater China taking the top three positions in the ranking of most active foreign buyers.
Agents report that mainland Chinese are likely to fuel transaction growth in the fourth quarter.
Forty-nine per cent of the industry expects offshore gaming-related transactions to increase in the year to come. In Makati City, this rises to 56%.
Note: Due to the Coronavirus pandemic, the Philippines has placed some parts of the country, including Manila, under lockdown. Filipino nationals, spouses or children of nationals, and residents; returning from abroad may be subject to quarantine for a maximum of 14 days upon arrival or required to undergo COVID-19 testing. Foreign nationals with existing long-term visas are allowed to enter the Philippines, subject to certain conditions.1
Source: 1. World Nomads: COVID-19 Travel Alert: Which Countries Have Open Borders?
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