One Year Later: Revisiting Real Estate in Cities that Felt Strong Pandemic Impact
This post is part of a series revisiting how the pandemic has impacted different markets in the country.
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For its trend report published last year titled The Outlook by KB Realty Group: Eager property seekers, diligent brokers and developers raring for change, KB Realty Group surveyed property seekers from varied backgrounds to obtain insights on their buying behavior and preferences before, during, and after the onset of the COVID-19 pandemic in the country and its consequent lockdowns. The crisis left many industries reeling from sudden shifts in quarantine policies, while others thrived on the renewed urgency for cloud-based and home delivery services. In the real estate market, property seeker demographic trends and desires changed too.
Assessing data from the four weeks prior to the announcement of a lockdown, the first week those quarantine measures were implemented, and the succeeding three weeks, One Year Later: Revisiting Real Estate in Cities that Felt Strong Pandemic Impact looked into week-on-week property seeker trends in terms of demand for certain property types, locations, and budgets.
Results showed that while virtually every other property type grew in terms of the number of leads throughout the weeks following the lockdown, leads for condominiums and commercial properties decreased. The change may be attributed to the heightened sense of uncertainty that many business owners had faced when non-essential travel to offices and to stores that were neither pharmacies nor groceries had been halted.
Among locations in Metro Manila, high-end cities in the metropolitan center experienced a decrease in leads. Makati, Muntinlupa, Taguig, and San Juan in particular were approached by property seekers with a suppressed appetite as indicated by the lower number of leads received in the weeks following the announcement on March 12, 2020.
This trend was also evident in the rental versus purchase demand for that period, as purchase listings — which contribute a significantly larger portion of listings on the platform — received a smaller share of all leads compared to rental listings. Understandably overwhelmed by the development of events at the time, various segments experienced losses during the onset of the pandemic.
Let’s take a look at how these segments are faring now.
Central business districts (CBDs) and technoparks to support commercial property demand; condominium performance recovers
In the latter half of 2020, the general state of commercial real estate remained uncertain. KB Realty Group data revealed that leads for commercial spaces decreased in the second half of 2020 compared to the first. Colliers International found that tenants “continued to take a wait-and-see stance” while looking for opportunities to lessen costs and restrategize.
However, narrowing into the performance of commercial properties relative to their locations, KB Realty Group saw optimistic developments. In its trend report discussing a forecast on the residential and commercial real estate in 2021, commercial properties located within CBDs and in cities with technoparks saw an improved performance in terms of both pageviews and leads from the first half of 2020 to the second half.
In CBDs, recovery of residential and commercial real estate went hand-in-hand, as workplaces that remained open for essential business as well as those which reopened and observed stricter in-house safety measures transformed nearby real estate offerings into corporate housing. The same report by KB Realty Group revealed that demand for condominiums had begun recovering in the second half of 2020, as the property type registered a 5% growth in pageviews and 9% growth in leads compared to the first half of 2020. Lamudi expects the increase to be sustained in 2021, projecting a 17.7% year-on-year growth in pageviews for condominiums in the first half of this year.
Winning some and losing some: Major cities post varied improvement towards the end of 2020
Demand for residential spaces in Makati showed progress in the latter half of 2020. Property seekers interested in the city appear to have been on the lookout for larger living spaces, with leads for houses and land surging by 92% and 91% respectively in 2H2020 compared to the same period the year before.
KB Realty Group sees commercial demand in the city showing progress this year, with Makati expected to attract up to 9% more pageviews throughout 2021. Muntinlupa appeared to be well past the recovery stage in the second half of the year, with commercial demand in the southern business district leading in terms of the highest growth in both pageviews and leads among Metro Manila cities with CBDs.
Interest in residential properties in the city rose even higher than pre-pandemic figures, with pageviews for condominiums, houses, and land in Muntinlupa increasing year-on-year in 2H2020.
Overall, San Juan posted year-on-year gains in the second half of 2020, with leads increasing by 7% and pageviews increasing by 51%. Pageviews for Taguig increased by 3% in 2H2020 compared to 2H2019. This is supported by its recovering residential demand–pageviews for condominiums, foreclosures, houses, and land in the city posted upticks in 2H2020 from the same period the year before.
Interest in real estate investing recovers, seeing continued growth in 2021
KB Realty Group data for the latter half of 2020 revealed a strengthened zeal from investors. Purchase listings dominated in terms of the breakdown of shares for all leads, contributing 57% in 2H2020 whereas it only amounted to 47% in the first half of last year.
KB Realty Group found that purchase listings had attracted 58% of all leads in January 2021 and 62% of all leads in February 2021, indicating a positive trend. The growth signifies a recovered appetite from investors that may progress throughout the year, as discussions over softened quarantine measures are in the works and the country inches nearer to a nationwide vaccine rollout.
