Event Coverage
Asian Markets Bounce Back Post-Covid
Speakers Gene Shi, Manabu Suzuki, Andy Mañalac, moderator Michi Olson and SILVAR GBC Chair Jimmy Kang
"Understanding Current Asian Markets & Buyers Post-Covid," a program featured by SILVAR Global Business Council on Tuesday, brought back licensed brokers from China, Japan and the Philippines, who in 2020 shared the Covid situation's impact on their real estate markets. This time, with the Covid situation downgraded, they say the real estate outlook in their respective countries appears much brighter.
China Real Estate Outlook
Gene Shi, director of International Operations of China Alliance of Real Estate Agencies in China, said recently the Chinese government eased Covid restrictions and allowed people to move around more and finally, as of two weeks ago, residents were allowed to visit abroad and return without mandatory quarantine.
"We are back to normal now," announced Shi.
Shi indicated last year the real estate market was a disaster, as the number of units sold dropped 20%. Sales in Beijing dropped 13%, and in some areas, sales were down by as much as 45%.
This year, Shi said the market it is looking brighter. The good news is China is in the urbanization stage. The expectations are the market will achieve $1 trillion in transaction volume by 2033.
"It is the golden age for real estate in China," said Shi.
With urbanization, the dollar amount per square foot is rising and now at $220 per square feet on average. However, the turnover rate of homes is slow, said Shi, about 2% compared with the U.S. rate of 4-6%.
Shi said although urbanization is good for the country, with rising home prices the Chinese market is not a friendly market for first-time homebuyers. He is seeing a great majority of buyers are second-time buyers who seek to move up to larger units.
Japan Real Estate Outlook
Manabu Suzuki, co-founder and vice president of International Agent Ltd. in Japan, is enthusiastic about the real estate market and investments there. Suzuki said although use of masks is customary in Japan, Covid is no longer a threat in Japan.
Suzuki said inflation hit the Japanese economy for the first time in 30 years, but compared to other countries, Japan is experiencing just modest inflation. "We are only one country where the interest rate does not change much. It has stayed similar since pre-Covid and pre-inflation."
Low interest rates mean low value of the Japanese yen. This has made the price of property in Japan a bargain compared to property in the U.S.
"This is a great time to buy and invest in property in Japan," said Suzuki.
Prices in and about 60 kilometers from the city center, known as the "safe haven," have remained steady. Suzuki noted an investor cannot go wrong buying property in this area.
There is a huge gap between demand for old and new apartments in Japan. Suzuki suggested buying an old apartment which is 50% lower in price than a newly built apartment would be a bargain for anyone wishing to invest in property there.
Philippines Real Estate Outlook
Andy Mañalac, co-founder and chairman of Havitas Developments, in the Philippines, is also enthused about the future of real estate in the Philippines. The country is "open for business." Covid is not the threat it used to be. People are gathering, life is back to what it was pre-Covid, though wearing masks is recommended as a safety precaution.
Mañalac pointed to the trend toward more horizontal, low density and pet-friendly housing development projects. Many are investing in landed properties, known as "farm lots."
The Philippines is driven by its population, said Mañalac. The country has a growth rate of 1.5% and currently a population of 112.9 million people. The population is young. Over half of the population is in the 24-64 age group, so this is a plus for real estate because there is a huge potential for upcoming first-time homebuyers.
Another plus for real estate is remittances from overseas foreign workers (OFWs), which account for 11% of the country's GDP. OFWs are heavily investing in real estate. The exchange rate favors the dollar, so investing in the country would favor the OFWs who earn higher salaries abroad, Americans or Filipinos wishing to retire in the country.
Mañalac noted investing in the Philippines should follow where people are moving, and movement these days is heavily in the island of Luzon, particularly in and around the Metro Manila area, in CALABARZON, which includes the provinces of Cavite, Laguna and Batangas in south Luzon.
All three brokers issued an open invitation to members attending the program to visit so they can realize the growing potential of investing in their respective countries.
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