Pandemic gives rise to second home market
Following months of lockdown and economic uncertainty, a new market segment is revitalizing the real estate industry disrupted by COVID 19.
The second home market, focused on gated resort communities in Batangas province, has benefited from rising prices since March this year. High-net worth individuals tired of being cooped up in Metro Manila and looking for investment opportunities have been driving purchases, according to a recent study by leading real estate services firm Leechiu Property Consultants (LPC).
Transactions in Tali Beach, Kawayan Cove, Peninsula de Punta Fuego and surrounding areas have scaled up with most buyers seeking healthier environments away from the metropolis’ major business districts where transactions have correspondingly slowed down due to rising COVID-19 infections. “At least 40 properties have changed hands in the past few months in Punta Fuego alone. I haven’t seen this volume of transactions in 20 years,” said David Leechiu, LPC CEO.
Newfound accessibility through recently completed expressways have reduced travel time to these picturesque coastal communities from Metro Manila.
Improved internet connectivity offering speeds of up to 100 megabits per second have likewise spurred demand for these second homes in gated and managed communities.
Consequently, property values in these neighborhoods have risen by 20 percent to 46 percent from 2019 to the present with many transactions done in cash.
Nonlisted transaction values for average lot areas of 400 square meters-800 sqm range from P10 million to as high as P50 million. “And bids for properties in these markets do not look like they will slow down any time soon. In some areas, there are many offers but no homes to buy,” LPC disclosed.
The study further noted that these properties were likely to appreciate in value even after the pandemic as new roads like Cavite-Laguna Expressway and Cavite Expressway, and improvements in the South Luzon Expressway and other thoroughfares cut travel time from these residences to the metropolis.
Since 2015 and the rise of the infrastructure boom, prices in these communities have been slowly but steadily increasing. The pandemic triggered a spike in prices with a Punta Fuego property now commanding anywhere from P12,000 per sqm up to P60,000 per sqm. The higher figure is reserved for scarce cliffside lots in this stunning seaside destination.
With the opening of a new airport in Clark and new thoroughfares like Tarlac-Pangasinan-La Union Expressway, LPC forecasts a bigger property boom that would draw not only domestic residents and travelers but also international tourists to resort properties in the southern and northern coasts of Luzon like La Union and those in the northeastern part of the island which have largely been untapped. A tourist from Singapore or Hongkong, for instance, would save close to two hours travel time flying in through Clark instead of Ninoy Aquino International Airport en route to tourist destinations north of Metro Manila.
The rising popularity of second homes and other resort properties “are not just impulse buys driven by pandemic sentiments. They are also well-evaluated, carefully planned moves of investors with the foresight to know that these properties will remain prime long after COVID-19,” according to the study. The pandemic has merely refocused attention on these seaside havens.
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