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Data from the Bangko Sentral ng Pilipinas shows a condo unit bought in 2016 is valued 35% higher five years later. (Artist’s illustration of Fortis Residences, DMCI Homes’ second upscale development located in Chino Roces Ave., Makati City)
There are growing fears of a global recession — or reduced world trade and a financial crisis —and this will surely affect the Philippines if it does happen.
In response, many individuals and businesses are holding back on investment plans and are putting off big-ticket purchases like a house.
The uncertainty can make you reluctant and ask: is it the right time to buy a property and invest in real estate?
Real estate is a low-risk storage of wealth. At a time of high inflation, investing one’s hard-earned money through a parcel of land, a house and lot, or a condominium unit is a good way to preserve and grow your wealth compared to low interest earnings from bank deposits.
Those who are actively seeking to buy a house or commercial space should keep an eye out for good deals, as crisis periods may push some property owners to rush the sale of an asset for cash. It’s a good opportunity to seize, as sellers may agree to a lower price in exchange for a liquidity boost –since real estate demand would most likely rise.
Investing in a parcel of land, a house and lot, or a condominium unit is always good way to preserve and grow your wealth especially at a time of high inflation.(Artist’s illustration of Sage Residences, DMCI Homes’ latest condominium development in Mandaluyong City.)
The rise in property prices may slow down during an economic slump, but it will eventually bounce back and fetch a higher price down the road. Resale value will be high given that housing is a necessity, and properties located near business districts or major roads will fetch even more competitive real estate rates.
The Philippines is now in recovery mode after the pandemic but has been grappling with rising consumer prices like the rest of the world. The central bank responded by raising interest rates, which pulled up loan rates charged by banks. It appears that the United States and Philippine central banks are not yet done with rate hikes just to tame inflation, and this gives a hint that lending costs will continue to climb over the next couple of months.
In the same vein, postponing plans to buy your own property will also cost more.
You don’t have to hold back if your finances allow it. Seize the opportunity to invest in real estate when it comes.
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