Investing in a home is an important financial decision to make, but identifying the right time to buy a house is of equal importance as the actual purchase. Besides the personal financial status, one should consider the property price, interest rate levels, and even the month of purchase. This is how important timing is.
The Philippines has been 8-years strong when it comes to real estate performance. Properties in Makati CBD alone experienced a 132% rise from 2010 to 2018 according to an April article published on the Global Property Guide website. Despite this, prices did not become too costly and the yield is still in good number.
But how do we make sure that 2019 is a good year for real estate investment?
The Home Inventory
One crucial thing to check in order to gauge whether it’s the right time to purchase is the inventory of properties. When there are fewer houses for sale, a price increase is expected. However, when there’s an increase in the number of properties for sale, there will be a price drop.
The Philippines currently experiences a double-digit rise in the real estate scene according to the Philippines News Agency in March. Take advantage of this opportunity. Grab properties while they are at their lowest price yet.
Regularly check real estate data and status reports, plus the well-researched yearly predictions from real estate experts like Colliers International to prepare yourself.
Increase in Buying Power
In January, the Philippine Statistics reported that the employment rate in the country increased to 94.8%. With job growth, there is also an expected increase in the purchasing power of the people, which property developers definitely take into consideration when the plan projects.
No matter how pricey it can get, people will continuously need shelter. It is one of the basic human needs after all. And house prices tend to increase along with time. Now is the time one gets more affordable house options.
Slowed Inflation Rate
The best time to buy a house is when interest rates are low. And interest rates depend on the country’s economic performance.
Inflation in the country is in its all-time high at the start of the year. According to Rappler, people are discouraged to purchase a house. And according to predictions early this year, the inflation rate isn’t going back down any sooner. The Bangko Sentral ng Pilipinas set the country’s inflation rate from 2018 to 2020 within the range of 2% to 4%. Because of this, bank interest rates doubled and range from 6.5% to 8%.
To much surprise, the Philippines’ inflation rate in April 2019 slowed down to 3% – the lowest in 16 months as published in Trading Economics. Investing is a risk and this is might be a good sign to take that risk now.
This disparity is a critical thing to consider. Two years ago, the interest rates were much lower and this could be the very same thing we’ll say in two years time.
Good Economic Status
Despite inflation, the country’s economy is said to be doing well. When the economy is well, it is most likely that you are doing well too. Two indicators to check could be (1) how strong the new home construction status is and (2) the income and employment number.
According to reports published on The Philippine Star website, because of budget approval, there is a delay in the capital formation growth in the first half of the year. But it is expected to accelerate when the infrastructure investment regains its momentum by the bottom half of the year.
Whether you are thinking of investing in a home this year or next, always consider all investment aspects before coming up with a decision. Money and preparedness are important, but so is timing. Know what you want, do your research, ask questions, consult with knowledgeable people, and trust your instincts. You can do all these at the upcoming Lamudi Affordable Housing Fair on July 20 to 21 at the Glorietta Activity Center where you can expect booths from SMDC, the Premium Sponsor, and Major Sponsors such as Lancaster New City by ProFriends and Federal Land. DMCI Homes, BPI Family Housing Loan, and Aboitiz Land, which are Minor Sponsors, will also be present. The Subdivision and Housing Developers Association, Inc. (SHDA) is the official Event Partner. The event’s Media Partners are Business World, Business Mirror, Malaya, Philippine Daily Inquirer Property, and Philippine Star.
RSVP to the Lamudi Affordable Housing Fair to get updates on the event: www.facebook.com/events/653533641831518
In the end, the house you will purchase will be yours and you can opt to live comfortably with your very own home or sell it in the market with a higher value in the years to come.
Source: Philippines News Agency in March, Philippine News Agency, Philippine Statistics Authority, Trading Economics, The Philippine Star https://www.lamudi.com.ph/journal/why-you-should-invest-in-a-home-this-2019/