The COVID-19 pandemic has plunged the entire world into a financial crisis, and nearly every industry – from oil to agriculture, luxury goods to hospitality, have suffered. Many investors are left wondering what exactly the impact is of the coronavirus on the real estate market and if investing in real estate during a pandemic is a wise decision.
Is there still a demand for real estate?
Despite the ongoing global recession, experts say there will always be a demand for residential spaces. Real estate has proven its resiliency over other forms of investments, such as stocks and bonds, the latter fluctuate heavily depending on the economic conditions of the times. Increase in money supply (i.e. printed money) leads to an inflation, which will cause the devaluation of your money in the bank. Instead of risking the loss of money, let it grow by investing it something that’s been proven to appreciate over time: real estate.
The reason behind real estate’s stability is simple: people will always need to have a place to live in, especially when it is close to the basic necessities such as groceries, places of worship, and the like. This fact seems to hold true even during the COVID-19 pandemic. A huge factor in real estate retaining its attractiveness despite many other businesses and industries declaring bankruptcy is that, for many people, a home, especially a well-built one, will always take precedence over any other type of purchase. The bulk of their savings will always be spent towards renting or purchasing a home, no matter the economic condition.
What are good real estate investments?
Considering that the Philippines still is, after all, in one of the worst recessions in recent history, the best kind of real estate to invest in would be condos. This is because of the relatively low capital required to purchase condos, as well as the lesser amount of money required to rent it or purchase it from a broker. On top of this, many condos, such as the condos in the Katipunan area, for instance, are smart condos with built-in Wi-Fi systems, reliable internet connections, and the ability to sync multiple devices together, which are essential for working from home during the pandemic. Katipunan, through the years, has weathered many financial crises, and has remained on top of the real estate market through it all. It was able to expertly ride through the 2008 global financial crisis, and is now a favorite amongst many developers, as evidenced by the many new condominiums, gated communities, and retail establishments that have been built and are being built within the past decade.
Most condos are also conveniently located close to groceries, places of worship, schools, and gyms, so homeowners don’t need to venture far to get to where they need to go. A major selling point for many potential renters or buyers.
Before you sign…
Before you take the plunge and sign your name on the dotted line, make sure you do your research on the developer. While many developers have dropped their prices in the attempt to move their units while our financial market is low, that doesn’t mean that you should immediately put your trust in just anybody.
Carefully do your research on each developer and see which projects are staying on track despite the current hiccups and limitations brought about by the pandemic. If they are still able to stay on track despite these unforeseen circumstances, you can rest assured that they’ll be able to deliver on their word. Make sure you also read up on what they’re offering, and what their terms are, and what their unique selling points are. If you can, visit the site to see the condo for yourself, or check out their website to see what units they’re offering. Ask as many questions as you can before committing to one! Money, especially during these trying times, is no joke, and you’ll want to be sure you invest in the right developer. At the end of the day, you’ll be glad you did so.
Points to ponder on
Investing in real estate, particularly during these unstable times, is not for everyone. Those whose jobs have severely been affected by the pandemic and the long periods of quarantine may want to hold back on making any big purchases in the foreseeable future. This may include those working in the hospitality, travel, restaurant, and even certain retail sectors.
Check your finances and ensure you have enough. Make sure your savings exceed at least six months’ worth of living expenses, or that you at least have an investment fund. If you have neither of the two, you’re still not financially prepared to own real estate. It’s better to start saving up for at least one of the two (if not both) before shelling out on a real estate investment.