Two years after the coronavirus pandemic, most parts of the Philippines have adjusted to the “new normal” and fully reopened. To date, schools have resumed face-to-face classes, traffic jams are back in full swing, and pandemic restrictions have loosened.The country has also jumpstarted its efforts to recover from the pandemic. Despite the inflation, the Asian Development Bank predicts that the economy will grow at least 6.5% in 2022, from the 6.0% forecast earlier in April. This positive outlook extends to the real estate market—particularly condo investing, which is more likely to grow moving forward.
Aside from Metro Manila, Colliers reports that Metro Cebu is also expecting an influx of condo occupants in 2022. This trend in condo take-up is due to players like overseas Filipino Workers (OFWs) and investors, as well as end-users” demand for leisure properties. Around 10,141 new condominium units are up for completion in Cebu in 2022.
8 Condo Investing Predictions and Things You Should Know
Here are predictions that will shape the upcoming condominium market.
1. Investors bullish as Cebu tourism and economy rebounds
Cebu expects Japanese and Korean tourists to return to the city by 2022 Q3 or Q4. Most hotels and resorts are also hiring to support the booming tourism industry, according to Carl Anton Suarez, executive vice president of the Hotel, Resort, and Restaurant Association of Cebu Inc. (HRRACI).
“My personal estimate would be sometime in March next year, that we’ll be having a 2019 pre-pandemic stage. But in the next few months, we will be experiencing an influx of tourists, which is a positive development, ” Suarez said in an open forum earlier this year.
Aside from that, Cebu is becoming a hotspot for upmarket residential developments as the pandemic triggered demand for larger homes.
“With more players getting into the market, projects have evolved and improved in Cebu. We have seen regional malls built as the consumer market and its spending power has increased,” says Richard Raymundo, managing director of Colliers Philippines.
2. Real estate in Cebu looking “rosy” in the next three years
The future of real estate is looking “rosy,” according to industry players who gathered at the first Real Estate Salespersons Congress in Cebu City last August.
Accredited Real Estate Salespersons in the Philippines (ACRES Philippines)” Chris Malazarte, president of ACRES-Cebu South, pins their positive outlook on the redeployment of OFWs who can further boost the industry. The consecutive rise in OFW remittances means the real estate industry can take advantage of it while helping OFWs look “not only for residential housing but also for investments.”
3. More condo projects in anticipation of “revenge spending”
Halted and planned residential and commercial condominium projects will resume as the market goes on “revenge spending” from the COVID-19 health crisis. Competition between real estate developers will ramp up, which is good for investors as they will have more options on where to invest their hard-earned money.
4. Improved and stable leasing in real estate
Metro Cebu is becoming stable in office leasing, investment, logistics, and sustainability solutions. Janlo de los Reyes, JLL Philippines” head of Research and Strategic Consulting, asserts: “The market is stable but there is uneven performance in the office sector, wherein there has been a mix of stability and lackluster performance across indicators.”
Simply put, office real estate investments may grow slower for real estate investors, as many businesses are still working on their back-to-office strategy. On the other hand, those who value stability over rapid growth may find commercial real estate the right choice.
5. Dollar-earning Filipinos expected to increase their real estate investments
One of the country’s real estate driving forces is its dollar-earning citizens, including those who work in the business processing outsourcing (BPO) industry, online virtual assistants, and OFWs. Even if the value of the Philippine peso falls with the current U.S. dollar exchange rate, dollar earners can send high-value money to their families back home.
This scenario may increase the leasing of condominiums and other properties in the next 18 months in the country, including Cebu.
6. Increase of millennial home buyers
Millennials aged 25 to 34 will most likely dominate the homebuyer population in 2022 since the youth employment rate is at its highest this year at 89.2%. The COVID-19 pandemic seems to impact millennials’ spending habits, prompting them to invest in long-term assets like home ownership.
Technology will be an important factor for millennials in home-buying since they use the internet and mobile devices extensively when exploring options. The increase in working millennials also triggers the demand for condos in the suburbs over cities. Because condominiums provide convenience and accessibility, they are an attractive investment for millennials.
7. The rise of micro-cities
Micro-cities or “cities within cities” attract millennial residents thanks to amenities and smart technology that complement modern living.
You can find clusters of residential and commercial buildings replete with groceries, malls, salons, gyms, and clinics. Micro-cities brim with innovations that enable millennials to live, play, and work without hopping jobs.
8. More foreign investors in real estate
The Philippine Statistics Authority (PSA) reports that foreign investments in the Philippines approved in 2022 Q2 amounted to P46.23 billion. This amount doubled the figures from the same quarter in 2021.
The real estate industry has the bulk of this investment, with P19.30 billion or 41.7% of the total pledges. Although the majority of foreign investment goes to Central Luzon, the Central Visayas region gets the second-highest share at P3.94 billion. These figures can significantly contribute to the positive outlook on Cebu’s real estate industry in the coming years.
Homes for the Future
Increased consumer spending and tourism, return to money-earning work opportunities, and growing foreign investments—these factors put Philippine real estate in the right direction. Indeed, now is the best time to invest in your first or next condo property.