Event Coverage
Realtors learn how Asian real estate markets cope with pandemic
Three real estate brokers from China, Japan and the Philippines shared the impact of COVID-19 on their real estate markets and prospects for the future at a Silicon Valley Association of Realtors global virtual event. They included Gene Shi, president of International Operations for Homelink (Linajia Real Estate Agency Co., Ltd.); Manabu Suzuki, vice president and co-founder of International Property Agent (IPA) Co. Ltd. in Tokyo, Japan; and Andy Mañalac, chair and co-founder of Havitas Developments Corporation in the Philippines. Michi Olson, Dean of Resources and Global Connections LeadingRE, served as moderator.
Shi said the coronavirus is largely under control in China and the country's economy is turning around. Reports indicate the economy expanded 3.2 percent from April through June compared to the same period last year.
The pandemic caused year-over-year real estate sales to fall 15 percent from January to April. Since then, the market is gradually returning to normal. Sales in May were just 10 percent below May sales last year.
Shi said the focus of real estate is on new homes, whose sales have increased 8 percent. Home prices are rising, especially in the major cities of Shenzhen, Nanjing, Hangzhou, Beijing. The rental market is expected to improve as college graduates move to different places for jobs. Shi said there is some concern that income of residents is projected to decline due to the government's regulatory policies.
Chinese interest in U.S. properties has shifted from high-end to mid-level properties due to China's growing middle class. Places of interest are in Houston, Orlando and Boston. For now, due to the travel ban, the Chinese can only surf the internet for these properties.
Suzuki said coronavirus cases started rising in Japan in mid-March. From April 7 to May 25, the government issued a lockdown. Unlike China, Japan had "a more gentle request-based lockdown." All public transport continued to operate, no penalties/fines were imposed, and citizens wore masks.
Japan's real estate sales transactions dropped 82.2 percent in May from the previous year, but prices were up 6.4 percent. Suzuki said buyers are maintaining a "wait and see attitude" and sellers do not appear in a hurry to sell. There is more buyer interest in resort getaways that have less coronavirus risk, but are still in close proximity to the city.
Like China and other Asian countries, Japan's travel ban has slowed investment in overseas properties. Interest in properties has shifted from the U.S. to Australia and the United Kingdom, though Suzuki noted, "Japanese have always had a burning desire to buy Hawaiian properties."
Mañalac said while the Philippines is still largely locked down, future prospects for real estate there are very good. The country is rated highly by major credit rating firms. Inflation has steadily dropped from 6.7 percent in October 2018 to 2.5 percent.
Key drivers of the Philippine economy are urban growth, business processing outsourcing, and overseas Filipino workers. The country is a young population whose average age is 24.7 years old. The buying peak age is 35-39 years old. Real estate sales increased 25 percent in 2020 Q1. Demand for homes is so high that there is a backlog of seven million homes.
"Philippine real estate could still finish strong despite the coronavirus," said Mañalac.
"This was SILVAR's first global virtual meeting, with members and guests from around the U.S., Canada, Japan, China and the Philippines. It was interesting to learn the differences in the way these Asian countries are coping with COVID-19, and how their markets are reacting to the pandemic. Sales and investment overseas have decreased due to the pandemic, but demand for properties has not. There's hope for a comeback once the U.S. and the world get the virus under control," said Joanne Fraser, chair of SILVAR's global business council.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
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