Covid-19 pandemic gives rise to second-home market in Philippines
FOLLOWING months of lockdown and economic uncertainty, a new market segment in the Philippines is revitalising the real estate industry disrupted by Covid-19.
The second home market, focused on gated resort communities in Batangas province, has benefited from rising prices since March this year.
High-net worth individuals tired of being cooped up in Metro Manila and looking for investment opportunities have been driving purchases, according to a recent study by leading real estate services firm Leechiu Property Consultants (LPC).
Transactions in Tali Beach, Kawayan Cove, Peninsula de Punta Fuego and surrounding areas have scaled up with most buyers seeking healthier environments away from the metropolis’ major business districts where transactions have correspondingly slowed down due to rising Covid-19 infections.
LPC CEO David Leechiu said: “At least 40 properties have changed hands in the past few months in Punta Fuego alone. I haven’t seen this volume of
transactions in 20 years.”
Newf o u n d a c c e s s i b i l i t y through recently completed expressways has reduced travel time to these picturesque coastal communities from Metro Manila.
Improved internet connectivity offering speeds of up to 100 megabits per second have likewise spurred demand for these second homes in gated and managed communities.
Consequently, property values in these neighbourhoods have risen by 20 per cent to 46 per cent from last year to the present with many transactions done in cash.
Non-listed transaction values for average lot areas of 400-800sqm range from 10 million pesos ($207,000) to as high as 50 million.
LPC said: “And bids for properties in these markets do not look like they will slow down any time soon. In some areas, there are many offers but no homes to buy.”
The study further noted that these properties were likely to appreciate in value even after the pandemic as new roads like Cavite-Laguna Expressway and
Cavite Expressway, and improvements in the South Luzon Expressway and other thoroughfares cut travel time from these residences to the metropolis.
Since 2015 and the rise of the infrastructure boom, prices in these communities have been slowly but steadily increasing.
The pandemic triggered a spike in prices with a Punta Fuego property now commanding anywhere from 12,000 pesos per sqm up to 60,000. The higher figure is reserved for scarce cliff-side lots in this stunning seaside destination.
With the opening of a new airport in Clark and new thoroughfares like Tarlac-Pangasinan-La Union Expressway, LPC forecasts a bigger property boom that would draw not only domestic residents and travellers but also international tourists to resort properties in the southern and northern coasts of Luzon like La Union and those in the northeastern part of the island which have largely been untapped.
A tourist from Singapore or Hong Kong, for instance, would save close to two hours travel time flying in through Clark instead of Ninoy Aquino International Airport en route to tourist destinations north of Metro Manila.
The study said rising popularity of second homes and other resort properties “are not just impulse buys driven by pandemic sentiments.
“They are a lso well-eva luated, carefully planned moves of investors with the foresight to know that these properties will remain prime long after Covid-19.”
The pandemic has merely refocused attention on these seaside havens, it said.