Prices of condominium units fell 8.4 percent in the fourth quarter of 2020 from a year ago as homebuyers preferred house-and-lot packages in the provinces, results of the Residential Real Estate Price Index report of the Bangko Sentral ng Pilipinas show.
“The decrease in the prices of condominium units in both the National Capital Region and areas outside NCR may be attributed to the postponement of new launches by developers and lackluster demand for transient dwelling amid the pandemic,” the BSP said.
It said, however, that prices of duplexes, townhouses and single detached/attached houses climbed in the fourth quarter by 20 percent, 16.1 percent and 4.7 percent, respectively.
Overall, data showed after a steep decline in the previous quarter, residential real estate prices of various types of new housing units in the Philippines recovered in the fourth quarter. RREPI rose by 0.8 percent year-on-year and by 2.4 percent quarter-on-quarter.
“The positive growth in the overall residential property prices was driven mainly by those in AONCR, which grew by 5.9 percent relative to fourth quarter of 2019. Prices across all types of housing units in AONCR, except for the prices of condominium units, rose in fourth quarter of 2020,” the report said.
Meanwhile, market research firm Euromonitor International said the changes in work and commuting patterns triggered by the coronavirus pandemic would affect urban planning, construction and real estate sectors.
“The surge in homeworking and reduced use of public transport are expected to change how consumers will work and travel. In turn, these changes are set to have a broader impact on the urban planning and construction sectors,” said Euromonitor International senior consultant Justinas Liuima.
Liuima said the growing popularity of working from home could have a “knock-on effect” on the real estate market, with a shift in interest from more expensive major cities towards less expensive secondary and tertiary cities near the main metropolitan areas.
The growth in suburban and outer city region populations may also provide new expansion opportunities for the construction industry as it could accelerate demand for housing in suburban areas, he said.
Liuima said that in the long term, this could result in a structural demand shift in the commercial property segment, as office and retail developers would follow the consumers and invest in new properties in suburban areas.
A shift towards suburban areas creates new challenges for cities and city economies, he said. “The population shift from the major metropolitan areas would result in overcapacity in existing transportation and social infrastructure, increasing the infrastructure cost burden. At the same time, cities are very likely to face declining tax revenues as workers and businesses would move to other areas,” he said.
Liuima said many cities were already witnessing this problem even before the pandemic, with the coronavirus acting as an “additional catalyst”.
“As more challenges unfold in the future, cities will have to find economical and sustainable ways to adapt to changing commuting and working patterns. Some cities have already started to repurpose streets,” he said. With Othel V. Campos