Real estate’s hot streak in 2022

·5 min read

DEVELOPERS who want to make it big and be more profitable in 2022 should prepare themselves for the influx of two big markets—the local and foreign buyers.

This is the forecast of one of the country’s top real estate brokers, Anthony Gerard Leuterio, founder of Cebu-based Filipino Homes.

According to Leuterio, the big comeback of tourism starting in 2022 will pave the way for a faster growth in real estate, especially since the industry is a by-product of tourism.

“Those who have positioned themselves in 2020 and 2021 will surely become big winners in real estate in 2022,” he said.

By this he meant that those who were able to scout ahead for potential locations, identify new real estate products while the economy is on a stagnant growth due to the Covid-19 pandemic and understand the new market preferences will be able to reap the opportunities next year.

“Tourism is just one industry. I expect that as soon as the country’s borders fully reopen, people will come to the Philippines, to Cebu and rent or buy properties here,” he said. “But the question now is—are we ready for their arrivals? Do we have enough rooms or properties for them to check or buy?”

Real estate inventories or projects completed since two years ago have already been depleted, according to Leuterio.

He said even at the height of the Covid-19 pandemic, real estate became one of the busiest sectors as demand skewed toward homes large enough to accommodate the work from home and e-schooling setup. Some buyers also bought properties in the countryside, away from the busy and crowded metro.

“People, since the pandemic, upgraded to pandemic-proof homes. They want more indoor space, wider outdoor space and even gardens, among others,” he said. “So those that were able to cater to this market this year by offering or launching new projects, they’ll reap better results next year. They’ll be busier.”

The housing market has remained resilient in Cebu because of the large unmet demand for housing, according to Grand Benedicto, Be Group president and chief executive officer.

The change in market preferences like buying properties far from the city center has also been amplified.

“The real estate industry is one of those that remained stable, unlike other businesses such as tourism, which has been badly hit by the pandemic,” said Benedicto, citing the group’s best-seller Balai condo tower in Punta Engaño in Mactan, whose address he described as a “billionaires’ row.”

Better gains in 2022

To post better gains in 2022, developers are advised to understand buyers’ purchasing power, invest in technology and build better quality and sustainable projects.

Leuterio said in order to capture the market’s attention, better pricing with flexible payment terms are some of the top considerations of the buyers these days.

While real estate has suddenly become a digital-first sector since 2020, continued investments in technology and other sophisticated digital tools will also give developers an edge over their competitors and win the market.

“The availability of digital payments and other tools that will make selling and buying more convenient are still crucial in the years ahead,” said Leuterio.

The realty market, which came to a standstill in 2020 because of the first wave of the Covid-19 pandemic, hastened its digital adoption, compressing what the industry believed to be a 30-year delay in technology adoption to 18 months and counting.

“The pandemic fast-tracked the innovation in real estate,” he said.

Moreover, demand for better and sustainable projects will continue to become the top picks among the buyers in today’s new business landscape.

“Cebu is already a condo market because of its expensive raw land. Those that want to offer house and lot projects should go to Naga, Carcar, Minglanilla and Consolacion. These are new growth areas for house and lot developments, but to support these investments, there should be support infrastructure that will help developers realize their plans whether they go south or north of Cebu,” Leuterio explained.

Condo prices in Cebu are now hovering at P130,000 to P140,000 per square meter, according to Leuterio.

He said other developers have stalled their projects also because of the increased construction cost.

Better designs with sustainable features like mini garden, open spaces and amenities that will promote health and wellness are also the top picks of the market moving forward.

One example of this is the fast-selling 600-unit Costa Mira beachfront tower of Cebu Landmasters Inc. which offers buyers a balcony amenity with a view of the Mactan beach.

Colliers’ forecast

Leuterio’s pronouncements are reinforced by Colliers International Philippines.

In its latest market report, property research firm Colliers said the Philippine market is poised for a rebound in 2022 on the back of the improving vaccination rate complemented by rising consumer and business confidence and government-projected economic recovery.

In terms of office projects, Colliers projects new supply to reach 723,400 square meters. “We see office deals picking up within and outside of Metro Manila starting in 2022.”

As for residential developments, Colliers projects delivery of 9,700 units in 2022, up 18 percent from 8,200 units in 2021.

The firm is also confident that the government’s decentralization program and major public infrastructure projects should push developers to launch more master-planned communities outside Metro Manila.

Millennials, aged 25 to 34, who account for about 28 percent of the country’s labor force will continue to sustain the demand for integrated communities.

The residential growth, it added, should also be anchored by the growth in overseas Filipino worker remittances.

Remittances from overseas Filipinos sustained their growth momentum for nine straight months, hitting a three-month high in October, according to the Bangko Sentral ng Pilipinas.

BSP Gov. Benjamin Diokno said personal remittances increased by 2.4 percent to a three-month high of US$3.12 billion in October from $3.04 billion in the same month last year.