‘Workcations’ Driving Increase In Phl Rental Demand Amid Pandemic

The demand for residential properties is heating up across the Philippines amid the COVID-19 pandemic, according to real estate platform, Lamudi Philippines.

With the new normal, Lamudi said in a statement on Tuesday, Aug. 10, the rental demand in the country has seen a “stable increase” in the second quarter of 2021 from the same period last year.

“The trend remarkably touches different residential real estate niches across different market segments, from affordable condominiums to staff housing down to vacation homes,” Lamudi noted.

According to the April to June inflation report of the Bangko Sentral ng Pilipinas, property prices in the main business districts of the National Capital Region continued to decline, while residential property prices outside the NCR went up.

Significant increase

Based on Lamudi’s data, the share of leads for rental properties priced at P200,000 to P500,000 in Luzon (outside Metro Manila) and the Visayas saw a significant increase in the second quarter of 2021 from the same period last year, with Luzon, in particular, showing a double-digit hike.

Meanwhile, the affordable condominium for rent market sustained a lead share above 15% since the first quarter of 2021. These properties cost from P5,000 to P15,000.

With all the strict travel restrictions and limited public transportation since last year, several companies in key sectors turned to large residential spaces near their offices and industrial plants to house employees.

“With the return to office gradually picking up, more workers are expected to gravitate towards condo rentals near their workplace to avoid the hassle and health risks associated with long commutes or limited transportation options due to community restrictions,” Lamudi said.

‘Workcations’

Aside from this, the real estate platform also said that the trend of “workcations” or working while on vacation “likely contributed to the aggressive rental market” in the second quarter of 2021.

Cebu City, Baguio, Tagaytay, Antipolo, and Quezon City were the five most-searched cities in this period, according to Lamudi, noting that these are travel hotspots and cities with access to nature.

Property seekers were also searching for Siargao, Bohol, Boracay, and Zambales.

Impressive lead growth figures were also seen in Batangas and Lapu-Lapu City since the first half of 2020. The rental value ranges between P5,000 to P30,000, the fastest growing price range in terms of leads generated.

Properties close to transportation networks

Lamudi also bared that more investors are searching for properties near the proposed Metro Manila Subway as the pandemic exposed the enduring demand to be close to transportation networks.  The 36-kilometer subway will stretch from Valenzuela to the Ninoy Aquino International Airport in Pasay City, promising as fast as 30 minutes of travel time from end to end.

Likewise, districts such as Ortigas Avenue, West Rembo, and Western Bicutan are popular among renters, likely because of their proximity to mass transit.

“Ortigas Avenue offers easy access to MRT-3, the railway line serving the capital region, as well as the soon-to-be-constructed MRT-4, eyed to connect Metro Manila and Rizal,” the real estate platform explained.

“West Rembo is near the newly-opened (Bonifacio Global City)-Ortigas Bridge and the Guadalupe and San Joaquin ferry stations. Meanwhile, Western Bicutan hosts the FTI station, the terminal at the South Main Line of the Philippine National Railways (PNR),” it added.

With the strong demand in the rental market, Lamudi projects “bright spots” for property investors despite these trying times.

Q1 of 2021

In the first quarter of 2021, residential real estate prices of various types of new housing units in the Philippines declined following a slight uptick in the previous quarter, based on the Residential Real Estate Price Index (RREPI).

Since 2016, the BSP has been using RREPI as an indicator for assessing the real estate and credit market conditions in the country.

The negative year-on-year growth in nationwide residential property prices was driven mainly by the drop of property prices in Metro Manila, which fell by 10% relative to quarter one of 2020.

“This was due to the decrease in the prices of condominium units, which outweighed the increase in the prices of duplexes, single-detached or -attached houses, and townhouses,” BSP data read.

Meanwhile, property prices in areas outside NCR rose marginally by 0.8% year-on-year as “the growth in the prices of townhouses and condominium units more than offset the drop in the prices of duplexes and single detached/attached houses.”