The Philippine residential real estate market is languishing due to COVID, but a modest recovery may already be underway. The pandemic-related restrictions and behavioural changes have reduced Philippine consumer and worker mobility by 45% compared to pre-pandemic levels. New residential sales have fallen but not collapsed. Developers are proactive in offering discounts and incentives. These are successful at attracted buyers. The Philippines real estate market is struggling against several negative factors. Like the rest of Asia, effective and widespread vaccination will be the game-changer in the Philippines. Vaccination will bring back tourists and foreign investors and permit the resumption of domestic economic activity. In the meantime, the government may consider targeted vaccination efforts. Thailand is exploring this in Phuket and Chiang Mai. Their goal is to vaccinate the residents of these locations so they can fully re-open to tourism from vaccinated travellers.
The companies expect demand to sustain a weak recovery in the second half. Their report says moderate costs and relatively high yields of approximately 6% on residential property in Metro Manila are helping drive demand. In the longer term, vaccination will be the game-changer for both Philippine real estate and GDP. Unfortunately for the county, widespread vaccination doesn’t look likely until at least next year. The Philippines had administered two vaccines per 100 people in May. That compares to five per 100 in Malaysia, 23 in China, and 51 in Singapore. Inbound tourism is vitally important to the economy and the real estate market. While still on the route to widespread vaccination, the government may consider targeted vaccination efforts such as the “sandbox” program underway in Thailand’s resort location of Phuket. Under this initiative, the government is striving to vaccinate all eligible adults in the selected area and then in July to open up to vaccinated overseas tourists from low-risk countries — without requiring quarantine.