There is now a more evenly distributed market for properties to rent and purchase in Metro Manila – a sign of shifting seeker preferences and diversified market needs.
In the first quarter of 2021, the distribution of leads for properties to buy and properties to rent was nearly equal. This progression is telling of the changes in seeker priorities brought by the pandemic, including shifts in the way people approach renting properties. To guide property sellers in the new demands of rental seekers, Lamudi weighs in on three major trends in the real estate rental market in the time of COVID-19.
ON-SITE HOUSING AS A HEALTH & SAFETY STRATEGY
In the early days of strict community quarantines last year, workers in export-centered industries were one of the few identified to be priority sectors – essential workers required to continue face-to-face operations and keep the economy afloat. Large-scale operations in industries such as food production, business process outsourcing, and other export-related services continued work as is, a difficult feat given the strict checkpoints and lack of public transport. To keep employees safe and minimize the need for travel, many companies provided on-site staff housing or availed of large residential spaces nearby for employees, as well as shuttle services to and from the plant to designated pick up or drop off locations.
Luxury rental demand continues to grow
The share of leads for luxury properties to rent worth PHP 200K – PHP 500K increased in Luzon and Visayas throughout the pandemic. In Luzon (outside Metro Manila), where many industrial plants and export processing zones are located, the share of leads for properties to rent within the PHP100K – PHP200K range increased in 2Q 2021 from the same period a year before. The same trend was observed in Metro Manila and in Visayas, with the lead share for properties within the same range posting slight gains from 2Q 2020 to 2Q 2021.
Demand for affordable rentals in the metro rebounds
In Metro Manila, we’re seeing demand for affordable rentals bounce back in 2021, as many return to the office or prefer proximity to the office as they transition to more flexible schedules in the new normal. Lamudi data shows a gradual recovery in leads for rental properties within the PHP 5K – PHP 15K range, which showed quarter-on-quarter gains since 3Q 2020 and has sustained a lead share above 30% since the first quarter of 2021.
For those not quite ready to purchase their own property yet as well as for many not based in the Metro, renting remains to be the more immediately accessible option. With renters worried about co-living in high-density spaces during a pandemic, property sellers can leverage amenities such as study and work stations, open air leisure facilities and updated safety measures to ease any concerns.
GROWING OPENNESS TO REMOTE WORK CULTURE IN PH
The growing openness of companies to work-from-home set-ups, increasing number of freelancers, and current global economic situation have driven many to opt to work in permanently remote positions. Defined by the World Economic Forum as an economy that “involves people who balance a range of income streams and work independently, job by job”, many in the country have chosen to become gig economy workers.
Freelancing a practical career amid a health crisis
Joining the gig economy is not only a lifestyle choice that the digital nomads of the 2010s preach but a more practical reality for many fresh graduates, employees with little security and reduced wages, migrants, and creatives who wish to earn extra income during the pandemic. During a time when hiring rates are low, many fresh graduates and those freshly out of a job have turned to putting up small businesses and upskilling to enter freelance online-based jobs in order to start earning.
Property seekers prioritize health, seek balance
This has in part fueled the option for many to work remotely from leisure destinations such as Ilocos Norte, Siargao, Palawan and even Boracay. Provinces have recognized the demand from many young professionals to work from scenic places with plenty of outdoor amenities long term, and in the case of Ilocos Norte, have even incentivized for entrepreneurs and remote workers to put up shop on their shores.
According to Lamudi data, some of the most sought-after cities overall in the second quarter of 2021 were renowned leisure destinations or cities with easy access to nature. Baguio, Tagaytay and Antipolo joined Quezon City and Cebu City in the ranks as the cities which attracted the most searches overall from property seekers.
While cities in Metro Manila were the most commonly searched areas in Lamudi, leisure destinations such as Siargao, Bohol, Boracay and Zambales are also heavily searched.
Brokers and sellers are encouraged to highlight homes that promise a more balanced lifestyle – fresh air and natural open spaces still within close proximity to commercial hubs.
Property seekers continue to search for vacation destinations
The aforementioned leisure destinations, as well as Batangas Province and Lapu-lapu, amassed impressive overall leads growth figures in the second half of 2020 compared to the first half of the same year. In the second quarter of 2021, these leisure destinations continue to be some of the most searched locations in the Philippines, possibly attracting investors, end-users, and renters.
With revenge travel refueling real estate demand, local hospitality markets incentivizing long term stays, and investors considering leisure destinations for their rental business, domestic tourism has found an unlikely promoter in remote work. Brokers and managers of properties in these areas must monitor tourism recovery initiatives, travel requirements in vacation spots, and Department of Tourism-accredited tour operators to ensure a safe and transparent travel experience for clients.
AS OFFICES REOPEN, MOBILITY REMAINS A PRIORITY
For the many that will be returning to the office, a home that enables mobility such as those close to mass transport hubs is the most practical choice. Renting a home near a bus stop or rail station allows for easier access to key commercial areas across Metro Manila. Lamudi data on proposed Metro Manila Subway destinations – areas with major foot traffic – shows that more property seekers were looking into rental properties in the second quarter of 2021. “Rent to own” was the top searched non-location specific term on the site in 1H2021. In spite of the pandemic, Lamudi data shows that areas such as Ortigas Avenue, West Rembo and Western Bicutan were primarily rental markets from 1Q 2020 to 2Q 2021 – likely due to their proximity to CBDs in Pasig, Makati and Taguig, as well as mass transit.
Aside from point-to-point bus stops available nearby, residents of these cities get some variety in terms of transportation options. Ortigas Avenue has access to the MRT-3 line and soon MRT-4. West Rembo is within close proximity to the BGC-Ortigas Bridge and between the Guadalupe and San Joaquin ferry stations. Meanwhile, Western Bicutan is home to the Philippine National Railway – FTI Station.
Many residents in these areas are able to access these transportation options via motorcycle, on foot, or via bicycle to minimize transfers. The efforts of alternate mobility advocates across the metro have played a pivotal role in improving the commuter experience and quality of living.
Real estate brokers and owners must gear for eventual return to work
Real estate owners would do well to hold on to their properties in these areas as land values appreciate upon completion of the subway project. In the meantime, should residing there not be the best option, owners can rent out the property to young professionals, small businesses and even BPO companies in need of staff housing depending on the owner’s property type and size.
With more vaccines arriving, a sizable share of workers who had moved back to their home provinces during the pandemic may be returning to the metro in search of accommodations close to the workplace. As such, brokers and property managers must be prepared to cater to seekers online – that is where seekers will be searching potential homes and making the necessary transactions. With on-site tours and ocular inspections not accessible to them, property seekers will put a premium on transparent and high-quality online listings as well as attentive customer service.
Virtual tours, quality photos, responsive online customer service, and transparent processes show the professionalism of the property owner or broker and help improve the online real estate renting experience.
The rise of online learning and remote work open up new rental markets and opportunities to create value in local economies still recovering from the impacted travel industry. To summarize, here’s a recap of our key insights:
- Mid-rise condos, houses with multiple bedrooms, and other types of private residential housing present attractive options for companies in search of staff housing or on-site housing near their office.
- Freelancers and remote workers are looking for long-stay accommodations outside the metro. Those with vacation rentals can pivot to meet that demand by adding work-from-home essentials such as high speed internet as well as providing assistance with travel requirements.
- Finding a safe and accessible home is still a priority for many renters returning to work in the metro. As many will still be searching for properties from the security of their home province before considering the move, brokers must be present online to cater to rental inquiries.
The future of work is not purely remote nor completely back to the old normal of daily face-to-face interaction. With offices more open to different working styles, the city will experience new schedules of worker-travelers – some alternating between the home and the office on a bi-weekly basis, others making the move across regional borders, and many choosing temporary homes in areas slated to benefit from nearly-finished infrastructure projects. The way workers work is changing, and so is the way they live.