When the ongoing COVID-19 pandemic reached the Philippine shores, among the industries hardly hit by it is the real estate market. This particular industry was already booming until the last part of 2019. But the effects of this pandemic on real estate were not instant.
With the local economy in the Philippines starting to reopen, property investors, as well as Filipino would-be homeowners are out to look for the best deals in the market. In the Q2 2022 Colliers Quarterly | Property Market Report – Residential, it was mentioned that property developers are already in search of residential opportunities despite the rising interest rates. The rising interest rates may have a direct effect on Metro Manila’s pre-selling real estate market.
According to the professional services company, compressing yields has also been the cause of why real estate developers are delaying the launch of their projects in the Philippine capital. Colliers believes that developers are now taking a more cautious stance as they await the release of the new administration’s economic agenda, including pro-property reforms, and gauge general consumer sentiment amid rising inflation and interest rates. According to the company, the secondary market is likely to benefit from the return of foreign employees as well as local firms’ return-to-office mandates. We see this positively influencing prices and rents in major business districts. To attract potential buyers, Colliers recommends developers to offer more attractive and innovative promos and payment schemes; highlight amenities that will differentiate their projects and attract discerning clients; explore securing green building certification, especially with the growing demand for more sustainable residential projects beyond the COVID-19 pandemic.
One of the factors that can make the final decision if now is the right time to acquire a property is when you are able to weigh in between renting and buying. Also, some factors to consider are if you are buying an investment property or buying overseas property. All of these will be based on one thing: the right computation.
Without any experience in real estate, it would rather be hard to do the computation yourself. Surfing online, I stumbled upon this online tool to calculate payments. The website, which was originally conceptualized to cater to the UK market (just change the currency and home pricing to reflect prevailing ones in the Philippines), has quite a number of nifty features like graphs of loan repayment, alongside with monthly and yearly amortization tables to help would-be buyers (like you and me) decide properly.
MortgageCalculator.uk follows the following formula to calculate for regular amortizing monthly repayments:
Mortgage Payment = P x (r / n) x [(1 + r / n)^n(t)] / [(1 + r / n)^n(t) – 1]
Whereas, P = principal; r = mortgage interest rate as a decimal; n = number of payments per year (12 for monthly); and t = loan term in years.
You may tell me that this computation can easily be done by hand, but why work hard when you can do it smart(er) using a computer (err, a website, actually)? Among the many things that I love about this website is that it was able to compare amortizing and interest-only payments side-by-side.
As a discerning buyer, the website can also show me monthly or annual amortization tables and charts by clicking on the calculate button. I can also easily share the link so that other buyers and interested parties can compare before actually deciding which property to get.
Did I tell you that even if the website has a lot of useful features, it is still mobile responsive and works nicely on any device type? When it comes to privacy, the website assures that nobody else will see my calculations unless I intentionally share them online.
In the September 2022 Property Market News of Cushman & Wakefield, they noted that the affordable and mid-market housing segments are seen to be stirred up by the higher price for borrowing as the result of increases in the benchmark interest rates. According to the property consultants, households forming demand in the affordable and mid-market housing segments are expected to be impacted by the real income squeezes due to high inflation levels in the short to mid-term.
The good news is even with several challenges affecting the global and local real estate sectors, the industry has seen some light following an awesome start this 2022. Property consultants and analysts in the Philippines agree and had been sharing very good reports citing that the demand has increased and the supply is expected to pick up more until the end of 2022 until the next year (2023).