Rains dampen housing sales, say experts
The rains are a house and lot buyer’s best ally. Property experts note that the wet season should be the perfect time to hunt for property—whether one is eyeing a vacant lot, a beach home, a commercial property or a residential haven. Why? The rains and foul weather will let the buyer find out the strengths and weaknesses of the property.
The rains reveal the presence of soil erosion and poor sewerage and drainage systems in the area, especially for subdivisions, according to green architect Amado de Jesus.
Alexis A. Acacio, who used to write a column for this section and now director at the University of the Philippines Institute of Civil Engineering, said that inspecting the site during the rains will show the area’s traffic behavior as well. Rains also help determine if roads have a siltation problem (or are prone to becoming muddy), which, in turn, would be a telltale indication of the “looseness” of the soil where the road is situated.
Vulnerability to landslides
Acacio stressed that rains would betray the area’s vulnerability to landslides.
The rains, however, may also directly affect the real estate industry on the purchasing level, according to property analysts.
Enrique Soriano, Ateneo program director for real estate and senior adviser for Wong+Bernstein Business Advisory, said the wet season starting June to October does have an effect on new home purchases.
Soriano reasoned that because of the weather, there is less time to visit project sites. “Prospects prefer to stay at home because of the monsoon rains. Even sellers are not as active promoting their projects,” he said.
Soriano added that another factor that affects potential homebuyers would be the opening of classes in June. Priorities are directed to the tuition as well as the daily expenses of family members attending school.
CBRE Global Research and Consultancy Group said the sales trend in both vertical and horizontal developments during the third quarter of any given year shows a general decrease in sales of up to 40 percent for horizontal developments, and up to 20 percent for vertical developments. This has been correlated to the peak months of the rainy season (July to September).
“Buyers tend to cancel attendance to open house events or sales blitzes, while brokers also tend not to arrange inspections to avoid flooding and heavy traffic during rainy days,” said CBRE.
CBRE Global Research and Consultancy Group added that for local investors, “August has been perceived as an inauspicious month to invest.”
Rebound by 60%
“However, the sales rebound happening in the fourth quarter goes up by much as 60 percent, since the cool, generally dry weather permits ocular inspections, and bonuses are mostly received by yearend,” observed CBRE.
Soriano said, “On the bright side, the peak months for the construction sector occur during the rainy months, as general home repairs for water-damaged sections, and other maintenance-related issues become immediate priority.”
Soriano explained that real estate sales are cyclical. The traditional selling cycle usually spikes during October to May. Retailers and developers officially open their commercial centers or malls during March and October.
“During slow sales, developers usually go on regional and international road shows. The overseas sales generated somehow make up for the slow local takeup,” he explained.