Is it safe to invest in real estate now?
Real estate is one of the sectors that indeed flourished due to the economic boom of the country in the past few years. Due to its solid return of investment, value appreciation in the future, and resiliency in a volatile market, it is deemed as one of the best investments to have. In addition to that, it ranked as the third safest investment in a survey done by YouGov, a global public opinion and data company.
Now, as the Philippines falls into recession as a result of the impact of the COVID-19 pandemic, would it still be safe to invest in real estate in this uncertain time or wait until the economy recovers?
With the current situation of the whole world, it is natural to think that this may not be the best time to invest in a real estate property. However, aside from its proven resilience amid a crisis, according to the Secretary of Department of Human Settlements and Urban Development (DHSUD) Eduardo Del Rosario, the Philippine real estate sector is also an economy pump primer.
It doesn’t only help diversify your portfolio, but also help the economy slowly recover from the impact of the crisis.
The risks may be higher now, but there are logical reasons as to why it can be advantageous and beneficial, especially in the future.
Wide range of options
Because of the decline in the consumers’ purchasing power, there has been an increase in the number of available properties in the market. Investors can use this opportunity to choose a property based on their preferences and how they want to use it.
Use the pre-selling properties as an advantage since they usually start at a lower price, which can ensure the return of investment as property value appreciates over time.
Another thing is to choose a property where there is growth potential. A good example of this is townships and integrated lifestyle communities, specifically in the countryside area such as Cavite, Laguna, and Batangas, where the developments are continuously progressing.
Since it offers a live-play-work-learn environment which makes it convenient for the residents, it became in demand in the market now that people are reflecting on how and where they live.
Always remember that when the value of the community appreciates, so is the value of your property. Also, keep in mind to purchase from a trusted developer to ensure that the investment is secured.
Developers will mostly likely offer softer terms and several payment options during this time to encourage more buyers to invest in their property. It is ideal for investors as these kinds of opportunities don’t happen in a robust market.
Low bank loan rates
The country has recorded its lowest rate in history as the Monetary Board cuts down the key interest rate of Bangko Sentral ng Pilipinas to 2.25 percent, which is the basis of banks and other lending firms in setting their loan rates for borrowers. It is the government’s way to increase economic activity while the country is still grappling from the impact of the crisis.
Lower interest rates will be profitable for investors, as lower rates will lead to greater profits, particularly when the investor decides to sell the property in the future.
Going back to the question earlier, “Would it still be safe to invest in real estate in this uncertain time or wait until the economy recovers?” Given the facts stated above, it is clear that investing today, even in an uncertain time, is still safe.
There are opportunities today that are not possible to have in a booming economy. It is risky, but it surely will be valuable over the years. Now is the best time to see the most sought-after projects outside the metro. Check out and visit Twin Lakes Tagaytay and The Hamptons Caliraya to know more about the best investment and what it’s like living with nature luxuriously.