Real Estate Industry Outlook in the Philippines: What's in store for 2021?

REALIZATIONS OF REAL ESTATE PANDEMIC TRENDS

It's now Feb 2021 and I have held off this 2021 outlook piece precisely because I was too busy thinking of what to say.Yes, 2021 unlike its predecessor the phenomenal 2020 is perturbly quiet and uneventful. Whether good or bad so far, we don't know.

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In the real estate scene, all developers including the top dogs have been silent about their 2020 performance except for one IPO company who happily announced that they even grew by 12% in 2020. This is probably considering that they are still a minor player despite going public. For the big guns, top developer Vista Land has been showing muscle to defend its turf in the horizontal segment.

Now that the vertical realm has been challenged on several fronts including the mass exodus of the POGO market, the impending oversupply may occur because of it. Shortly after this and in the offing is the correction in prices in some areas particularly those that were vacated by POGO employees.

Finally, the major effect of the protocols on occupancy in condos which are still regulated even after the lockdown is a huge obstacle for the industry as well. The Airbnb business for one has almost seen its demise during the height of the pandemic. All transient condos which were groomed for staycation setups for Airbnb were forced to transition to long term lease of minimum 6 months. Since the supply of these midterm rental condos increased, owners can no longer command the same monthly rents pre-COVID.

Shift to horizontal

Surely, condo development will see a rebound in the aftermath of all these. Indeed, condos are here to stay. I am sure there will still be condos for sale in years to come. But for now, people are shifting its interest towards house and lots and lots only for investments. This is evidenced by the demand noted by a property listing company citing significant growth in views and leads for horizontal developments. You now see an abundance of house and lot for sale in these listings.

Many areas outside NCR have been identified as hotspots including Antipolo, Bacoor, Dasma, Batangas, Pampanga to name a few. Cebu and Davao have also shown upward trend. These are areas where Vista Land properties are already positioned as self-sustaining, thriving communities. Camella, Lumina, Bria and Lessandra carry the different housing options for the market in these emerging areas. How lucky are their buyers who have truly gained from the pandemic by packing on some value appreciation because of the infra that are bolstered around the areas and the demand that it is now gaining.

Value appreciation becomes a crisis cushion

Just to emphasize, a friend of mine who lost her job consulted with me on how she can resell her Camella house and lot unit whose downpayment she has already paid. It was about 2.5 years ago when she bought the house and lot for only P2.5M. Before I answered her, I checked the current value of her property now and I was totally but pleasantly surprised to discover that the same property is now pre-selling at P4M. And since it is now due for turnover, it's value could easily amount to as much as P4.3M. Wow! That's almost 2M in 2 and a half years in appreciation. 

When I shared this with my friend, she was ecstatic but at the same time regretful that she had to let go of the house and lot property. After a month, she reported back to me that she was able to sell it and that she was able to recover all her payments and even earn a little (more than bank highest SA interest) from the transaction. It was according to her one of the best investments she's ever made. She promised herself that once she's able to stabilize her income, she will endeavor to get another Camella because she now trusts that it is the best real estate investment brand out there.

Conclusion

Truly, we are still in the pandemic period. Without the clear prospect of a vaccine on the horizon, the market is still on a wait and see stance. But everyone's hope is up. With all the savings that have been made by the middle income earners over sudden lifestyle changes, people are holding on to their money until such time that they can spend it. But once the fact that real estate is the most solid investment to own at any time is realized, they should want to spend that money into these worthwhile products instead. 

Now that people are wanting to move to areas where the air is still fresh and trees and greens are still abundant, house and lot properties are a gem to own. Coupled with the government infra finishing up on these areas, horizontal developers like Vista Land should be experiencing what they call a market euphoria. My advise is to ride the waves with these brands under Vista and you will surely get out of this crisis as a winner.