Will Property Prices Change After the ECQ? An Expert Answers
How will COVID-19 pandemic and global recession affect the real estate industry?
A lot of things have been put on hold due to COVID-19, and understandably, those who have been considering to invest in property have been having second thoughts. Even after the end of the extended community quarantine on April 30, putting out money when everything is still uncertain and the world is in recession may feel counter-intuitive; however, Professor Eric Soriano, World Bank/IFC Consultant and Executive Director at Wong + Bernstein Property Advisory Asia, says that as long as the crisis doesn’t get any worse, we may not need to worry much about dramatic price changes.
In a discussion on Facebook Live by ICON Executive Asia and the Philippine Daily Inquirer, the professor notes that if the COVID-19 crisis does extend to three to four months, prices may slide—which may be good for risk-taking buyers but not for developers.
“The good thing about the Philippine property sector is that price points are really, in a way, market driven in the sense that it is also developer driven, and there is still a backlog of supply… so when you put that all together, we don’t expect a dramatic drop of a particular area because of the crisis.”
He also shares that there are two things that can cause sudden price drops: “POGO (Philippine Offshore Gaming Operators)—if they’re not going to be renewed—and when there is a huge exodus of unemployment,” he says. “But if that’s not going happen, price points would probably be leveling off at a certain insignificant percentage.
As the Philippines is an emerging economy, the global recession may not affect the country as much as more developed countries. “Our economy is very resilient, but what is needed now is to objectively look at our business models,” he says of developers. “Back to basics. The biggest enemy here is not the virus, it’s the uncertainty.”
What would be a good property investment after ECQ?
If you’re thinking of investing, then best go for a property in a township. According to Professor Eric, townships are probably the most pandemic-ready among developments.
“It’s all about convenience, it’s all about security, it’s all about everything in unison.” The efficiency of townships are seen now more than ever. “It’s a city center in itself, but minute and self-contained, so when this virus hit, practically it has its own boarders.”
Townships, he explains should be a “non-negotiable model for developers now.”
“The concept of living and shopping there, and buying your essential stuff… is a great way to really make the residents and the investors so happy with their hard-earned money. It’s functional rather than aesthetic. You won’t see this in other developments that are one off.”
“I hope investors and residents won’t just look at the ROI, they should look at the qualitative aspects of township developments.”
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