Real estate sector remains optimistic
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- 09 May 2022
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The real estate sector remains optimistic despite the political issues dividing the nation ahead of the elections.
Industry players in the property sector say it’s business as usual for the industry.
After two years in the doldrums and barring any major geopolitical shifts and worsening tension among major economic powerhouses, the presidential election offers optimism for the sector regardless of the outcome.
“There is clearly an optimism within the real estate industry for its prospects in 2022, and there is undeniably a weight of capital available for investment,” said Anita Kramer, senior vice president of ULI’s Center for Real Estate Economics and Capital Markets in a report by the Philippine Daily Inquirer.
In the first quarter, the Inquirer's research team tracked and observed significant movements across asset classes and the once listless market appears to be on course toward its normal trajectory.
After almost two years of holding on to their life savings meant for home investing, buying is the only option left. The encouraging trend is not just consumer-driven—forward-looking developers are leveraging flexibility and convenience.
For completed projects, equity or downpayments are offered for as low as 5 percent, with the balance stretching to as long as 36 months interest-free! These are ready-for-occupancy homes and condominium units located in prime locations yet provide cash flow-friendly terms that are tailor-fitted not just to discerning end users but also to investors.
Price points
Another sign of a re-energized sector is the price point.
Developer-owned inventories have been marked for re-pricing this quarter. Stakeholders are waiting for elections to end. Even for projects outside the expanded National Capital Region, notably in Cebu, Davao, Iloilo and Bacolod, price increases are happening.
In the last few weeks, developers that I have talked to are expecting a revenue growth of over 10 percent in the first quarter, year on year. This is a remarkable turnaround after an anemic 2020 and a recovering but limping 2021.
Boutique developers and even designers are revisiting many of their expansion plans that have been set aside due to the pandemic. I should know as our office has been deluged with requests for all kinds of strategic and feasibility studies.
With this favorable but muted vitality emerging, it appears that the impact of the electoral process on residential real estate may not be as significant as others may have thought.
Resilient sector
Two events can influence real estate sentiments in a credible election.
First, when a party of the incumbent arises as a likely winner, there is an assurance that familiar policies will continue. Stakeholders will no longer second guess the next policy initiative, and expectations of the housing market will trigger a “business as usual” mindset for developers. Sales will definitely go north.
Should the opposition party win, we can expect people to get a little tentative as any new presidential mandate will certainly affect the economy. That is why it is important that immediately after the June 30 inauguration, the initiatives must be amplified with a capable and visionary housing leader with clear and convincing programs. Read More...
