The so-called “new normal” in this time of pandemic has brought massive changes to different business sectors in terms of health and safety. This brings no exception to the residential property market wherein condominium developments were seen to have been mostly affected.
Before the global health crisis took place, the demand for condominium living in the country was at its highest point, not only because of the attractive investment opportunities offered by the developers and the influx of OFW remittances but also due to the growing young professional population and start-up families, who were looking for their own homes within or nearby the cities. In this case, a lot of the developers have specifically built condominium projects for this type of home buyer, where they offer smaller floor unit cuts in multi-tower developments while still providing an urban-lifestyle environment and transportation convenience. The live-work-play concept in Metro Manila and major provincial hubs became a popular market trend because of the worsening traffic in the country. Huge takers of the units were also recorded from the Business Process Outsourcing (BPO) and Philippine Offshore Gaming Operators (POGO) industries.
The strategic locations of these condo towers have been the top reason why residential units were sold like hotcakes in the last several years. Moreover, the congested towers and smaller unit sizes were not considered a hindrance by the middle-class population to acquire units mainly because owning one is already considered a good investment. Real estate is the top investment that if not all but most of Filipinos are aiming for. Prices go up in a matter of few years and competitive returns are expected especially if you have a good eye on the best properties in the market.
Unfortunately, this unprecedented time which caused challenges all over the real estate sector has mostly affected the residential condominium developments. In the midst of the pandemic, reports have shown that vacancies took rise in fully leased condo towers all over the Philippines. Metro Manila has felt the greatest hit, followed by other major commercial hubs in the rural parts of the country.
The effect of the COVID-19 pandemic on real estate prices in the residential property sector
In a report released by Bangko Sentral ng Pilipinas (BSP), the residential real estate price index (RREPI) specifically in the condominium market has recorded a 2% change from the first quarter of 2020 to this year’s same quarter. This is a lower percent rate compared to the first quarter of 2020 versus 2019 at 4.6%. Some of the reasons for the decline in the RREPI for condominium units are weak consumer demand and low preference for condo projects because of the tight spaces and limitations in environment-friendly features.
*The Residential Real Estate Price Index (RREPI) is an indicator of change in the prices of residential properties in the Philippines over a period of time. The growth of the index measures house price inflation.
Source: Bangko Sentral ng Pilipinas (BSP) – bsp.gov.ph
The change in demand for the residential property market
In terms of demand in the residential property market, consumers are currently leaning towards the house and lot developments as the preference for more open spaces, natural light and air and right density is gradually increasing. This demand is high coming from mid to high-level executives and expatriates. This breed of home buyers mostly has their own families and kids whose priority is to protect them from the global health risk.
For the mid-income market, developers must consider fringe areas for future developments as well. Not only it is near the townships and business districts, but also offers a more affordable range of units.
With this in line, a good location is still at the top of the requirements of the consumer market, however, the health safety features have begun to be more considered too.
Trends for condo Developments in the New Normal
Condominium developers are now expected to adjust to the new normal as the market is inclined towards projects that can offer the right size of units and density, good ventilation and light for natural disinfection, and ample space for gardens and outdoors. The health risk has made consumers realize how important these features are when searching for their next homes. For those who have experience living in a condo, it would be common to assume that a spacious garden may or may not be available for you, as you also need to share it with the rest of the tenants. Hence, it is a dream for most of the tenants to get a more nature-like environment in their chosen investments. The good news is that now, green spaces are considered a necessity and not just a luxury. It is an integral part of condominium planning. In a study by Beyer et al (2014), green spaces can not only help diminish health risks but also helps lower levels of symptomology for depression, anxiety, and stress. It was concluded that green spaces can be a potential mental health improvement strategy in real estate developments.
Establishing projects that are adequate to positive environmental features such as natural air and light, open green spaces, and low dense floor towers are not just factors of the health safety concerns by the market caused by the pandemic, but also believed to have psychological health benefits by creating a scenic environment which reports better health and increased physical activities and exercises.
Furthermore, a property that gives off a balance in terms of function will be a perfect choice for home buyers. These are properties that can be as homes, halfway homes, and an investment wherein they can have it leased out.
Developers are also highly encouraged to come up with attractive promotions and incentives and continue to offer flexible payment terms. As the digital age is also booming in the country, property technology platforms such as virtual reality tours and automated or online communication tools between tenants and property management for building concerns are also seen as good strategies to further adapt to the constant changes in technology.
The importance of excellent property management has also been identified during these times. Property management firms are expected to level up security and safety measures within the premises of the condo developments to ensure a healthy environment for the tenants. They must be efficient in adapting and developing protocols related to COVID-19 policies set by the government.
Responses set by the developers and property managers were seen to be mostly the same as the common goal is to protect the health of the tenants. Some of the protocols set in the condo developments are to not allow visitors or limitations on tenant visitors so as to avoid social gatherings. Amenities such as pools, gyms, and function rooms were also closed for some periods during the implemented lockdowns.
In addition, tenants were also encouraged to stay in their units to avoid too much contact in the public spaces while still ensuring that the common areas are disinfected in a timely manner.
Hermosa COHO and how it promotes a healthy residential environment
Situated in the progressive city of Las Pinas, a remarkably fresh development has found its way to the top options of many home buyers. Hermosa Crown Asia, developed by real estate giant Vista Land and Lifescapes, Inc., is a modern condo development that offers a balance of urban living in a posh environment. The masterplan project is a promise to provide a resort-living experience to its home dwellers, with lush green spaces and the right unit sizes that the public will be attracted to.
The surrounding road networks being improved through the government’s projects is also one of the main factors why this condo project is a perfect choice for young professionals, starting families, and investors. The Hermosa COHO offers good accessibility that will connect you to nearby business hubs such as Makati City, Bonifacio Global City, and Bay Area in Pasay and Paranaque cities.
The development has exceptional amenities. Aside from the swimming pool, fitness gym, and function hall, which are all usual integral parts of a condo project, Hermosa COHO also provides the following amenities: Clubhouse, play park, play court, picnic grove, jogging path, and reading nooks.
Moreover, the condo project offers the following spacious units:
Studio – 24 sqm
One bedroom – 33.96 sqm
Two bedroom – 43.86 sqm
If you want to know more about the Hermosa COHO, click here.
Related Blog: Getting Ready to Go Outside Post Quarantine
