Inquirer Property hosted a webinar last May 4, 2020 with various industry experts to discuss the impact of the current crisis and how to future-proof real estate industry. Below is a key summary of the discussion. You can head over this link to read more and watch the webinar.
Defining ‘new normal’
What people are referring to as the “new normal” is not likely to be an instantaneous event.
We will probably see a gradual and cautious behavior—no new project launches, moves will be more opportunistic, and developers will be trying to build up liquidity and minimizing risks.
Both consumers and developers may go for less risky and less capital intensive ventures.
Some would try to retrofit their products, repackage them so that they can release some of these inventories in the marketplace.
On the design side, attention will be paid to social distancing measures in public spaces, a review of material and building specifications since there will be concerns about safety, and a review of procedures on the property management side.
On the policy side, this will be a period of review and calibration and of setting new standards.
New market preferences that may result in actual new products, strategic offerings that may dictate the shape and form of new shopping centers, hotels, office spaces, of manufacturing places and residential condominiums.
A lot of innovation that happens precisely because the crisis necessitated it.
“It’s interesting to recall that some new products actually emerge from a crisis, like after the global financial crisis in 2008, we saw a surge of affordable condos in the CBDs.
Townships, estates and mixed-use communities have gained popularity even before COVID-19 but their value was further highlighted during the ECQ.
The kind of convenience provided by these communities is no longer a luxury but an imposed necessity that future home buyers are expected to demand from property developers.
Future proofing in this crisis points to resilience, self reliance and self economy.
Homogenous developments tend to be less resilient so bringing different uses closer to each other and expanding what is often cited as live-work-play—to include health, learning, food production maybe, small scale manufacturing, recreation, open space—can make a community as diverse as possible.
Impact of COVID-19 on prices
Prices will be “a bit soft but it’s going to be temporary. - Jose R. Soberano III, chairman, president and CEO of Cebu Landmasters Inc.
Homes are real necessities, which meant there is a real demand, considering the huge backlog in some segments.
Reactions of developers will depend on two things: strength of the balance sheet, which will dictate if one is financially strong enough to weather this temporary crisis, and the strength of a product which could still see a strong demand if it’s superior.
“In light of a situation like this, the probability that demand will go down is probably small.
Market is expected to demand three basic things from developers: an emphasis on healthier buildings, bigger spaces, and property management.