Real Estate in the Philippines, before and after the pandemic, will they survive home mortgage??

Sometimes before half of the year 2020, one of the leading Real Estate research companies in the Philippines has released their fearless forecast of how and what the situation will look like. Lobien Realty represented by its President and founding partner Sheila Lobien, has said that there is a big chance that Real Estate in the Philippines may survive this pandemic. As Economic markets of many countries across the world have dramatically deteriorated and will suffer the scourge of the COVID-19 for some time to come.

 

Lobien Realty, one of the fastest rising real estate consultancy companies in the Philippines, the outbreak of COVID-19 has adversely affected the economic growth of so many countries around the world- including those of nations situated in the Asia Pacific region. China’s economic growth diminished by -0.91 percent because of the spread of COVID-19 during the first quarter of 2020. Similarly, both Indonesia and Singapore encountered economic growth reduction of -0.26 percent. As indicated by a report from World Bank, Southeast Asian nations like the Philippines, Thailand and Malaysia will need to strategize on how to manage their losses, while Vietnam could be fortunate enough that its economic activity’s decrease is just below average.

 

The impact of the COVID-19 pandemic on the Philippine economy has been significant. According to Oxford Economics, the projected growth of the Philippine economy is down to 3.9% in 2020, from its original estimate of 5.9%. LRG reports that the Philippines’ Real Estate industry, in particular, has been seriously impacted by COVID-19 as the pandemic effectively put a stop to the operations of most businesses. These include the Philippine Offshore Gaming Operators or POGOs which has been occupying 1.14M sqm of office space since 2016; the Business Process Outsourcing (BPO) Industry which had a recorded office take up of 400,000 sqm in 2019; and, traditional offices which leased 370,000sqm.

 

Probably the business or the commercial side will be able to survive. But how about the single individuals or the small businesses? If you are currently in a house mortgage loan, there is a tool that can help you set a target budget to stretch your finances. The Mortgage calculator.

A lot of Filipinos have migrated in different parts of the World and there are stories that you can read about how you will safely secure your monthly amortization. and if you are interested if there are over payments, and so much more.

To site also some reports shared to us by Jones Lang La Salle  about the rising trend and need for real estate spaces and demands to prepare for the 2020 boom.

 

The Metro Manila Office Market

Available Supply and Rental Rates in Metro Manila have gone up with total office supply growing by 900K sqm in 2020.Average Rental Rate has increased by 9% from Php 1,060/sqm to Php1,160/sqm. A total of 900K sqm of new office space is set to be available in the market this year. As of March, 350K sqm has been leased out already by different business industries.

 

However, COVID-19 has slowed down the office market considerably, especially in Metro Manila. LRG says there is a certain decline in expansion of POGO due to the travel ban imposed by the government and extended ECQ. Projected POGO Office Demand this 2020 is 200 000 sqm less as contribution from POGO is expected to slip by USD 0.8 Billion (or around 0.2% of GDP). BPOs, another hardest hit industry, may soon scout for alternative business locations in the emerging provincial hubs which offer more competitive rental rates and lower labor costs and have become sites of new government infrastructure projects. Traditional offices, on the other hand, may also seriously consider work from home arrangements that can possibly lower their overhead cost.

 

LRG, however, predicts that there could be an improved demand for residential and office space by 2021 at a minimum of 700,000 sqm across Metro Manila, provided that the COVID-19 outbreak will be contained by 2H 2020. The demand for office space will be revived towards the latter part of the year once existing and new POGO companies as well as BPO companies continue their growth all over the country. LRG says there may even be a stronger demand from the BPO sector as a result of global companies’ need to outsource their businesses while their countries battle the destructive effects of the coronavirus.

 

One thing that totally grew out of the blue is the need for logistics and warehouses. Amidst the pandemic, ecommerce platforms has sprouted out of nowhere. New companies are there to offer more and try to take a slice of the pie. The 2 largest online ecommerce platforms have been overwhelmed with transactional orders despite the situation of the economy in the Philippines. People were buying heavily online.

 

Getting all these details on hand, Real Estate forecast 2021 will still bring a positive lookout despite the current situation we have been.

The big question is if it is the right time rent or buy real estate properties during a pandemic. Will the situation drive down the price for a buyer’s market? Here’s a tool from Mortgage Calculator UK  like knowing what mortgage you can afford versus your hard earned money. Or if you need to remortgage your property.

 

Eli

Eli has 28 years of extensive IT sales expertise in Data, voice and network security and integrating them is his masterpiece. Photography and writing is his passion. Growing up as a kid, his father taught him to use the steel bodied Pentax and Hanimex 135mm film and single-direction flash, Polaroid cameras, and before going digital, he used mini DV tape with his Canon videocam. He now shoots with his Canon EOS 30D. Photography and blogging is a powerful mixture for him.
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