Although 2020 has been full of challenges for the real estate industry, it remains to be an iconic year given the new opportunities that emerged from the pandemic. Despite the stay-at-home orders marking the majority of the year for Filipinos, popular real estate locations managed to remain resilient in terms of demand. Interestingly, new hotspots have emerged as a reflection of the market’s new normal needs.
In The Outlook by Lamudi: Provincial cities and overseas interest contribute to real estate resilience, we identified the top spots that have been attracting demand in the first half of the year. In this report, we’ll dive deeper into the most popular locations for Lamudi property seekers from January to December 2020.
|REAL ESTATE HOTSPOTS IN METRO MANILA|
Cities that host central business districts have maintained their popularity all throughout the year. It suggests that while everyday activities, particularly work, have become less dependent on location because of the rise of virtual arrangements, property seekers still put a premium on living within (or at the very least, near) cities that offer various employment opportunities.
Considering the figures from Lamudi, these are the capital region’s real estate hotspots for 2020:
- Quezon City
- Las Piñas
- San Juan
Quezon City remains to be the most in-demand real estate location on Lamudi. Back in 2019, Quezon City topped the list of the most popular Metro Manila cities. In 2020, property seekers were considering this as their preferred location, with the city receiving 12.76% of overall pageviews.
Interestingly, 24.05 percent of Lamudi’s active property seekers come from this location as well. As much as it’s a real estate hotspot, a lot of the current residents in the area are actively looking for property locally.
Makati, Pasig, and Taguig, the next popular cities in the capital region in 2020, host business districts. They remain to be popular as they offer greater convenience and mobility going to and from workplaces.
Meanwhile, the rest of the cities are areas outside the usual popular locations. Manila is near Quezon City while Parañaque is close to Makati and Mandaluyong shares borders with Pasig. These areas have experienced greater interest this year as a result of development, fueled by the public and private sector, spreading into cities beyond business districts. With the work-from-home set-up becoming part of the new normal, these locations outside but near major CBDs may see more popularity in the next months and years.
Zooming in on the Market
The top Metro Manila cities that host central business districts are marked by a strong rental market this year. The rental interest overtakes purchase in the majority of the popular locations, in Quezon City, Makati, and Pasig.
The trend is a reflection of the market’s move to find temporary living spaces near their place of work. Meanwhile, the strong purchase interest in cities outside the CBDs, such as in Manila and Parañaque, suggests that these locations serve as permanent residences.
Houses and condos remain to be the most popular real estate types in the metro. In Quezon City, units in horizontal developments represent 29.25 percent of the leads. In Makati, condos dominate with 34.90 percent of the leads. Almost 30 percent of the leads in Manila are on house types.
Pasig, on the other hand, has the two real estate types commanding most of the leads, 29.53 percent on houses and 29.41 percent on condos. In Parañaque, 35.84 percent of inquiries are for houses. The preference for this property type may be attributed to the need for outdoor spaces for safe recreation amid the pandemic.
|REAL ESTATE HOTSPOTS OUTSIDE METRO MANILA|
Provincial cities have seen an increase in interest as well this year. The two key cities in Visayas and Mindanao, Cebu City and Davao City, are among the most popular. Interestingly, the majority of cities included in the list are near the capital region.
These are the real estate hotspots in the provinces in 2020:
|1. Cebu City |
2. Davao City
10. San Fernando
Retaining its most popular status from 2019, Cebu tops the list of highly in-demand provincial locations this year, receiving 4.15 percent of the total pageviews on the Lamudi platform. Similar to Quezon City, Cebu commands a very active market, accounting for 26.56 percent of pageviews for provincial cities.
The popularity of the location may be credited to the fact that it’s among the top choices of businesses setting up shop in provinces. For this reason, properties become more attractive to different kinds of home buyers.
Davao, another metropolitan area outside Luzon, also made it to the list of top provincial cities. The King City of the South is likewise a recipient of investments made outside Metro Manila. Davao’s local real estate sector is especially in a promising position as the infrastructure developments in the area continue to unlock property values and make real estate investment attractive.
Interestingly, Cebu and Davao are renters’ markets. In Cebu, about 62.56 percent of pageviews and 60.65 percent of leads are for rent transactions. Meanwhile, in Davao, 53.35 percent of pageviews and 50.23 percent of leads are for rent transactions.
Meanwhile, the rest of the popular provincial cities, except for Baguio, are interestingly in Regions III and IV-A, areas near the capital region. For a while, even pre-pandemic, there has been a gradual movement of going outside Metro Manila. Property prices are relatively more affordable and there is more land yet to be developed.
In 2020, the year of the pandemic, this movement may have been accelerated as people look for residences in less densely populated locations, offering wide, open spaces and accommodating physical distancing requirements. The top cities mentioned fit those needs.
It’s also worth noting that half of the top provincial cities outside the urban centers are tourist hotspots: Antipolo, Angeles, Baguio, and Imus. This may suggest that the market is on the lookout for residential locations that not only accommodate new normal living, but also enable leisure amid a crisis.
Zooming in on the Market
Except for the urban centers in Visayas and Mindanao, the purchase interest is stronger than rental interest across the top provincial cities. This makes the case for people finding temporary living spaces in cities that host CBDs but look for permanent residences outside the crowded districts.
Regardless of the transaction intent, whether buying or renting, houses earned the most number of pageviews and leads in provincial cities. This suggests that the market has gained greater appreciation for living spaces that offer bigger rooms, which will accommodate work-from-home and distance learning arrangements, or outdoor areas that provide safe recreational opportunities amid the prolonged lockdowns.
|TOP SOURCES OF OVERSEAS DEMAND|
As for overseas demand, locations with a high concentration of Filipino workers show strong interest in Philippine real estate. These are cities in Asia, the United States and United Kingdom, and the region of Middle East:
|6. Los Angeles|
8. Abu Dhabi
Singapore flexes the biggest share of demand, accounting for 1.36 percent of the total pageviews. Singapore is the 10th biggest importer of OFWs based on the 2014 report from the Department of Foreign Affairs, hosting about 200,000 workers.
The most active section of the market in these overseas locations are the millennials. Those aged 25 to 34 represent 30.58 percent of pageviews. Interestingly, the most motivated are the generations older, 45 to 54, accounting for 28.60 percent of the leads. Millennials abroad may be looking for property for their family, as investment options and sources of passive income, or for possible employment opportunities locally, while the older generations consider investing in real estate for retirement.
A greater portion of the market plans to buy instead of rent, with buy transactions receiving 83.14 percent of pageviews and 76.99 percent of leads. House (38.83 percent) and land (37.72 percent) receive most of the leads for buy transactions from property seekers in overseas locations. On the other hand, condominiums (31.84 percent) edge to the top spot for rent leads, followed by apartments (30.84 percent), and houses (27.71 percent).
|STRONG FINISH FOR 2020|
Real estate hotspots in the year 2020 reflect the sentiments of the property market in the new normal. These are the things we learned:
- Cities that host CBDs, whether in the capital region or in the provinces, continue to be popular as people prioritize being near workplaces amid the travel restrictions. In these local real estate markets, renters dominate. Investors who are looking to buy and lease out property may see a promising venture moving forward.
- Fringe locations in the metro enjoyed greater real estate appetite as development spilled over to areas near financial districts. With new properties launched and infrastructure developments underway, these cities will likely see more demand. Property seekers must seize the opportunity now to buy before these areas achieve prime status.
- Provincial cities that have been brewing in popularity in the last years have strengthened their appeal further this 2020. Real estate buyers have seen the benefits of living outside the capital region amid the pandemic: less densely populated neighborhoods, fewer coronavirus cases, and affordable property values. Moreover, the availability of outdoor spaces allows safer leisure activities.
- The move towards provincial tourist hotspots may indicate that the market is leveling up preferences, making sure that their residences accommodate new normal living essentials and extras, including recreation.
- Overseas interest remains unfazed this year, with Singapore topping the list of overseas cities showing interest in Philippine real estate. Overseas buyers looking for houses suggest a permanent investment into the country, whether for residential or investment purposes.
Despite the challenges the real estate industry faced amid the pandemic, it managed to rise above the crisis. Hotspots that have been popular for years managed to withstand the health emergency’s blows, as emerging locations reached in-demand standing. With all that has happened throughout the year, it’s safe to say that the industry finished strong in 2020. This puts the sector in a better position to take on 2021, especially as optimism and confidence brew over the news of vaccination.