Amidst the lockdown, the spirit and atmosphere that prevail in the real estate industry in the Philippines is of pragmatism and fear on the present, and hopefulness and eagerness to bounce back on the future.
Industry analysts from Colliers International and Santos Knight Frank Santos have chimed in on the data from Oxford Economics. And the international banking community that generally states that economic growth will, as initially projected, go unrealized.
JP Morgan Chase Bank has stated that it reduced the country’s full year gross domestic product (GDP) growth projection to 5.1 percent year on year from an initial forecast of 6.2 percent, citing that “the impact of the COVID-19 outbreak on the Philippine economy may be larger than first anticipated.” Oxford Economics which forecasts that the Philippine economy will rise by 3.9 percent in 2020 down from its original forecast of 5.9 percent. Global stock markets reeled to historical lows, underscoring the economic impacts of the pandemic.
Santos Knight Frank, though expresses optimism, saying that: “despite the impact of COVID-19 and downturn in international stock markets, the Philippine real estate industry continues to have reasons to be optimistic.”
Philippine Real Estate in 2020
They cited seven trends they’ve identified early on that’ll shape Philippine real estate in 2020. “These include the roll out of real estate investment trust (REIT), which is seen to unlock a number of opportunities in the property market; continued expansion of business process outsourcing industry as fueled by healthcare, animation and game development; and the growth of co-working spaces.
Other trends include: developers’ new focus on sustainability as they become increasingly aware of their environmental impact; the growing requirements of industrial and logistics industries. Which have turned their sights outside the capital region for new sites for expansion; Metro Manila remaining a prime residential market; and finally, the growth of co-living spaces, as well as the rise of the micro-studio as a halfway home for Metro Manila’s workforce.”
Colliers, on the other hand, gave credit to the “coordinated policy and monetary response from the Philippine government and the Bangko Sentral ng Pilipinas“. Which is to boost the morale and confidence of the investors and proponents in the Philippine real estate sector. And this they say can happen even before the yearend. Oxford Economics also anticipates a quick recovery in 2021, with the country’s GDP projected to grow by 7.3 percent.
The demand and the continuous need for space and its utilization for commerce in office, shops, residential units, logistics buildings, and hotels will persist in the real long term. It has stalled and has receded, but like a rubber band, building up potential energy. It’ll spring back to life in due time. The world was caught off guard, unprepared with a disease without a cure or a preventive vaccination; and national governments have yet to experience the scope and speed of the spread. Thus the current social and economic predicament. This, however, is seen to be cured in time, by time. Research, testing, planning, organizing, adjusting, and managing — they all take time, after all.