A year past the onset of the global pandemic and economic crisis, the Philippine residential real estate market had evolved along with seeker priorities and preferences. In the first quarter of 2021, seekers were eager to move forward with more calculated investment strides, especially after the country experienced a downtrending unemployment rate and a slightly improved consumer confidence in the previous quarter. While economic activity in the fourth quarter of 2020 had been positive, research firm IHS Markit expects the surge in new COVID-19 cases in mid-March 2021 to constrain the country’s pace of economic recovery. In this report, Lamudi looks into the performance of the residential real estate market in 1Q2021 as consumers adopt new attitudes towards purchases and investment.
RESIDENTIAL REAL ESTATE DEMAND IN 1Q2021
In the first quarter of 2021, Lamudi saw shifts in property demand trends as seeker age groups explored different properties compared to previous quarters.
Gen X drives growth in condominium market.
The first quarter of 2020 saw college students and fresh graduates of the 18 to 24 age bracket leading in terms of pageview growth for condominiums. Consumer preferences in the first quarter of 2021 revealed a new trend. This year, seekers aged between 45 to 54 commanded the highest year-on-year growth figures for pageviews for condominium listings at an impressive 106.80 percent. Seekers within the 35 to 44 age bracket also showed more interest in condominiums in 1Q2021, exhibiting the highest quarter-on-quarter pageview growth at 6.68 percent.
Lamudi’s previous trend report titled The Outlook on the Residential Market: Property investment as a safe haven during a crisis revealed a recovered demand for housing in central business districts (CBDs) in the first half of 2020. With flexible schedules and remote work continuing to be the norm, more C-suite executives within the age group may be looking at homes closer to the office.
Although lead growth from the 25 to 34 age bracket weakened this quarter compared to the last, the age group still contributes the largest lead share for condos. Data from this quarter also revealed that while the luxury condominium units priced above 20M attracted the most pageviews at 21% out of all property types, listings priced 1.5M to 33Mcontributed the most leads.
As more millennials look at real estate as a viable investment option amid the pandemic, first-time buyers may be pursuing more immediately accessible price points albeit showing preference for aspirational residential options. Sellers may add value by retrofitting units with aspirational interior designs and lifestyle-centric amenities such as sleek modern furnishings, smart appliances, and large windows.
Apartments led the property search in terms of lead growth.
Apartments led growth for leads by property type in the first quarter of this year. Leads for apartments increased by 16.11 percent in the first quarter of 2021 compared to the same period in 2020. The uptick in leads for apartments may be driven by consumers’ desire for extra space without compromising the experience of living large in units smaller and more affordable than the single-detached house.
Seekers aged between 25 to 34 led demand for this property type, contributing 42.76 percent of all leads for apartments. Its size is especially attractive to young professionals and couples planning to expand their family and wish to move in immediately. With the country forecasted to witness a boom in newborn babies within the first half of 2021, as reported by the Commission on Population and Development in January 2021, the next few months may see more couples wishing to increase their floor area.
Leads for apartments were most prevalent in Quezon City and Manila in the first quarter of this year, which contributed 36.74 percent and 23.74 percent of leads respectively, out of the top five apartment location markets in the country. Quezon City and Manila were followed by Pasig (18.94% of leads), Makati (12.12%) and Caloocan (9.09%).
Outside of Metro Manila, Cebu was the strongest apartment market at 34.14 percent of leads in the first quarter of 2021. In Mindanao, Davao received the most pageviews for its apartments in 1Q2021 but Cagayan de Oro received the most leads at 54.85 percent.
Residential market for retirees showed signs of recovery.
Out of all age groups, property seekers over the age of 65 showed the most optimistic growth figures in the first quarter of 2021. After posting a 107.89 percent dip in annual pageview growth in the first quarter of 2020, interest from the retiree market rebounded to an uptick of 80.32 percent in the same period in 2021. The positive trend is indicative of an older population adjusting to the Internet of Things (IoT) and growing their presence on digital platforms. The age group also exhibited the highest year-on-year (93.58 percent) and quarter-on-quarter growth (77.16 percent) in pageviews for houses in the first quarter of this year.
The 65 and up age group demonstrated the highest growth in annual pageviews for land listings as well. After decreasing by 38.90 percent quarter-on-quarter in the second quarter of 2020, pageview growth from the age group slightly improved over the next consecutive quarters. Annual figures were more impressive, with pageviews from the retiree market increasing by 109.79 percent in 1Q2021 from 1Q2020. The uptick is supported by the consumer segment’s purchasing power, as well as the appeal of land as an asset that only continues to appreciate in value – an especially attractive point for consideration given the increased risk aversion following the pandemic outbreak and global crisis.
Antipolo continues to lead the house and land market outside Metro Manila.
Outside the bustle of Metro Manila, Antipolo was the prime location of choice for house seekers and land seekers in the first quarter of this year. Antipolo garnered 24.05 percent of all pageviews for property seekers looking for houses outside the region. The city also attained the largest share of leads for that period at 39.11 percent. For land, Antipolo attained the greatest share of pageviews outside Metro Manila at 38.58 percent, and the largest share of leads at 30.61 percent. Identified as one of the leading leisure destinations in Lamudi’s most recent trend report, Indicators of Growth: Where to Invest in 2021, the city’s abundant green space and tranquility makes it an excellent option for seekers looking for a relaxed pace without moving too far away from family in the metro.
More seekers flock to Calabarzon in search of repossessed properties.
Seekers looking to invest in foreclosed properties showed a preference for the Calabarzon region the first quarter of the year. Foreclosure seekers appeared to zone in on San Pedro in Laguna, which attracted the most pageviews from the seeker market at 26.74 percent. This was followed by Bacoor in Cavite and Lucena in Quezon Province at 20.93 percent each, Quezon City at 16.28 percent, and General Trias at 15.12 percent. Given all the new residential, commercial, and infrastructural projects developing in Southern Luzon, the trend may be driven by seekers looking to capitalize on more affordable properties in a region ripe with opportunities for price appreciation.
Interestingly, younger age brackets showed the most interest in foreclosed listings. The 25 to 34 year old consumer segment shared a notable share of pageviews for repossessed properties at 47.19 percent. The trend reinforces millennials’ increased desire to manage their personal finances and pursue sound investments. The significant interest in foreclosed properties indicates the age groups’ diligence in identifying opportunities to maximize their home-buying budget, or create other streams of income through short-term investment.
RESIDENTIAL REAL ESTATE SUPPLY IN 1Q2021
Listings on Lamudi showed a sustained increase in 1Q2021, with houses followed by land continuing to contribute the biggest share of listings. Year-on-year growth data also revealed land and apartments posting the highest increases.
More land to buy or lease in 2021.
In terms of supply, land and apartments experienced the largest growth in number of listings year-on-year in the first quarter of 2021. Listings for land on Lamudi grew by 120.8 percent in 1Q2021 from 1Q2020, while listings for apartments grew by 38.7 percent. The property types contributing the largest number of new residential listings in the first quarter of this year were houses, which contributed 56.80 percent of new listings for that period, and land at 29.01 percent. In the fourth quarter of last year, houses and condos were the most prevalent property types listed at 46.59 percent and 29.68 percent respectively.
Data for the first quarter of 2021 points to a rise in available land to purchase or lease. With the ongoing pandemic, some landowners may be seeking to convert their land assets, free up cash and beef up their emergency funds. Given the rise in cloud-based services and the consequent demand for warehousing and logistics spaces, others may be looking to create larger passive income streams as they lease out their land for industrial or commercial use and collect rental payments.
RESIDENTIAL REAL ESTATE SUPPLY IN 1Q2021
Lamudi data in the first quarter of the year showed property seekers putting the creation of a home environment that promotes their health, well-being, and productivity as a top priority. Demand for fitness amenities and a strong internet connection in a property continued to increase.
Demand for health and wellness amenities, strong internet connection continue to grow amid delayed vaccine rollouts and extended quarantines.
Fitness amenities such as swimming pools and gyms continue to be property seekers’ top desired property features, increasing from a lead share of 32.84 percent in the last quarter of 2020 to 34.19 percent in the first quarter of 2021. The recent crisis has pushed consumers to consider their health and well-being in their purchases, and the home environment significantly influences an individual’s lifestyle now more than ever. Given its consistent rise in leads over the last year, more property seekers are expected to look at health-related amenities as a prime consideration in their purchasing decisions.
Having a reliable internet connection also grew increasingly important this year, increasing from 12.57 percent of all amenity lead s last quarter to a greater share of 18.24 percent in 1Q2021. With the delayed vaccine rollouts and reinstated community quarantine restrictions, flexible work and remote classes appear to continue being the status quo. Given this, a strong internet connection has become an essential feature of the home rather than an added amenity.
KEY TAKEAWAYS
The past quarter has seen large shifts in preferences from different consumer segments. The residential market has undoubtedly changed, as we see more activity from older age groups and witness changes in seekers’ property type preferences.
To recap, here’s a summary of our key insights:
Shifting preferences
- Trends point to younger property seekers becoming more open to considering foreclosures and affordable properties as an investment vehicle.
- Previously dominated by fresh grads and millennials, the condominium market witnessed an uptick in demand from parents and executives in the 45 to 54 age range — a trend driven by prolonged remote work and school.
Family matters
- Driven by demand from young professionals and couples considering larger spaces, apartments showed optimistic growth figures in 1Q2021.
- The market for retirement-ready properties and family homes grew in the first quarter of the year, with property seekers aged 65 and up contributing a remarkably high increase in pageviews on the site. They were particularly interested in listings for land.
Eagerness to invest
- More property seekers looked to Region IV-A for purchasing foreclosures, a development indicative of a more investment-forward market.
- Land was dominant in terms of new supply on Lamudi in the first quarter of this year, as owners seek more liquidity.
Real estate trends in 1Q2021 point to Filipinos acting on their demand and appetite towards investment gaining more traction. With the country’s population growing more rapidly, more property seekers freeing up cash, and consumer brackets with more purchasing power becoming increasingly active in the online real estate space, Lamudi has observed a more eager residential property seeker market. Should planned vaccine rollouts take place in due time, household spending and the economy as a whole should inch towards full recovery.
While the real estate market has shown optimistic signs in the first quarter of the year, the recent announcements of a stricter lockdown followed by an extension of that quarantine period is concerning. The improvement of our public health remains to be an essential driver of our economic development during these times, and investment in any long-term asset will be more probable as both disposable income and consumer health is improved and assured.
For trend report requests or inquiries, contact deborah.ong@lamudi.com.ph or mark.bailey@lamudi.com.ph.
Article and Photo originally posted by Lamudi.
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