Robust, Resilient, Ready: SMDC primes the economic pump with continued development
When the Covid-19 pandemic caused the world to go on a lockdown, the global economy felt the impact, causing job losses and business closures. With the damage that the pandemic has brought upon the global economy, the market is hard pressed in making decisions. How does investing in real estate figure in a pandemic-stricken economy?
“Governments and central banks around the world have been moving the fiscal and monetary levers in efforts to support families, encourage spending and promote businesses,” says Jojo Romarx Salas, head of Global Research for Leading Real Estate Companies of the World (LeadingRE), a Chicago-based think tank.
“Stimulus packages that boosted liquidity and stock markets all over the world already benefitted from these. However, fund managers would likely allocate a portion of their portfolios to hard assets like real estate because of the volatility of the equities market,” he says. This is because real estate is least likely to be affected by the deflation caused by economic upheavals. The asset is real, tangible and permanent, its price movement goes steadily upward even in times of crisis.
The demand for shelter, in particular, will not be waning anytime soon in spite of the economic dislocation. Salas discloses that most of LeadingRE’s members around the world are seeing property prices holding up. Lockdowns bottled up the demand; when markets re-opened, LeadingRE members experienced a surge in demand, with a refinement in buyers’ preferences.
Salas says that the Philippines is still a top choice among foreign buyers. He says that expatriates living in the Philippines – especially the Chinese and the Koreans – may still opt to buy condominium units. Countries with resilient currencies like Japan view the Philippine real estate as still attractive.
“In the Philippines, a backlog of six million residential units and a strong demand among the middle and upper classes are expected to sustain the property market. There will be disruptions and a rebalancing of priorities, and some may even discontinue their existing purchases. But shelter is still a very high priority among Filipinos,” Salas says.
Read more: Inquirer