The impact of COVID-19 on Philippine real estate is still unclear.
The effects on rental, buying, and selling demand should be considered separately, but if the impact on rental demand is prolonged, it will eventually affect buying and selling demand and lead to a decline in real estate prices. In other words, real estate, for which income gain cannot be obtained, has no presence as an investment. Considering each, the biggest factors that affect rental demand are online gambling, Airbnb, and remote work promotion.
About half of the GSR managed properties are rented by Chinese, many of which are engaged in online gambling. For now, online gambling is treated as BPO, and it is expected to resume operations. The companies that were doing Airbnb are pretty tough. I have been observing a lockdown for two months with regard to the theory of unnecessary office work due to the promotion of remote work and the loss of merit in the Tokyo metropolitan area, but remote work is not so familiar. It seems that it will return to its original state if it becomes GCQ.
So far, the obvious damage to rental demand is due to a small amount of Chinese returnees and the operation of Airbnb, but so far the damage is not so serious. Regarding the demand for buying and selling, the movement of stocks will be sluggish, but the price will not drop unless the owner who is in trouble with cash flow hurries to sell. Since the Philippine real estate market is not yet highly liquid, it is unlikely that it will convert to prices. In the long run, the real estate market is a rising trend, so owners who can hold it will continue to hold it. It’s hard to imagine a developer reducing the price. In other words, there is little demand for selling or buying, and there is no change for a while as a whole.