MANILA - Slow demand in rentals is seen to further drag the country's lease rates to bottom by next year before slowly recovering by 2022, a real estate specialist said Tuesday.
Joey Bondoc, senior research manager at Colliers International Philippines, said lease rates in the country dropped by 10 percent in the first nine months of the year, and is seen to end the year with a 17-percent decline.
He noted the 10-percent drop is the second-highest in the region, next to Hong Kong's 16 percent.
"We will still probably exceed the 10 percent [decrease in lease rates] before a slow recovery in the latter half of 2021, and we will probably see a pick up by 2022," Bondoc told ANC's Market Edge.
He said this is due to the work-from-home setup and the lower capacity of the market to afford spaces as unemployment rates ballooned this year.
The property specialist also said it will take some time for these spaces and assets to be "repurposed" most likely to "micro-warehouses" amid the strong demand in deliveries and logistics.
While the economy remains consumer-centric, Bondoc said firms are pivoting towards the "lockdown economy" where logistics thrive in servicing people working from home.
Despite lower leasing in commercial and office spaces, Bondoc said mid-income to luxury condominium residential projects have outperformed and are seen to drive the residential sector next year.
"The increase in the demand in mid- to luxury condominium units indicates that people are still awash with cash and they have the capacity to buy. The prices have gone up... and have been increasing, and we see this trend moving forward," he said.
Prices of mid-income to luxury condominiums start from P3.2 million to P20 million and beyond, per unit.