The Global Real Estate Market in the Post-COVID-19 Era
The price of real estate is a "barometer" of a country's economic and social development in many aspects. It is closely related to the SDG 1(No Poverty), SDG 9(Industry, Innovation and Infrastructure) and SDG 11(Sustainable cities and communities). In the past year or so, the COVID-19 Pandemic has caused severe damage to the global economy, and many countries have experienced negative economic growth. However, the global real estate market is exceptionally strong, and housing prices in many countries have risen the most in recent years: Turkey (30.3%), New Zealand (18.6%), Slovakia (16%) and Russia (14%) have risen by more than 10%.
What are the reasons for the rise in housing prices? Although different countries have different national conditions, there are also some common factors: the release of the US dollar has caused "hot money" to flow into the real estate market; the tightening of mortgage evaluation policies has led to increasing loan costs; common home office work caused by blockades and isolation; people seek for security due to potential risks such as unemployment and illness, etc.
In view of the countries where the two authors of this article are located, this article uses China and the Philippines as two samples to analyze the real estate market trends before and after the Pandemic. Both of the two countries experienced high housing prices before the Pandemic, temporarily fell due to the impact of the Pandemic, and will rebound as the economy recovers. However, there are still different characteristics and reasons for in-depth comparison of the two countries.

Chinese Real Estate Market: Gap between Big and Small Cities is Widening
Although real estate in many countries plays an important role in the economy, few countries rely on land finance like China. Moreover, most Chinese people have always had the concept that owning their own housing is one of life goals. This has led to the trend of China’s real estate prices being closely related to population distribution and demographic structure: where there are large populations, especially young people, real estate prices will be pushed up by active buying behavior; while in rural areas with serious population exodus and aging, the situation is just the opposite. This has led to a "Matthew Effect": large cities’ governments obtain fiscal revenue and accumulated sufficient construction funds by selling land use rights. Their economy is developing rapidly and the quality of life of citizens is continuously improved. And then more residents from rural areas choose to enter big cities to seek opportunities, which accelerates urbanization but also brings greater gap between urban and rural areas and among different regions.

Data source: 2020 China Statistical Yearbook, National Bureau of Statistics of China.
COVID-19 has made China's real estate market a V-shaped trend: housing prices that initially fell due to the virus hindering transactions quickly rebounded as the Pandemic was brought under control. At the social level, as people’s demand for security has risen sharply and they have realized the importance of local government governance, large cities with good medical facilities and sufficient employment opportunities have become more popular. According to the statistics, the national average price of commercial housing in March 2021 was 10,313 RMB yuan (USD 1,593) per square meter, while 240 of the 319 Chinse cities had an average price of less than 10,000 RMB yuan (USD 1,545) per square meter. The average housing price in Shenzhen is 41 times that of Hegang, a small and remote city from Heilongjiang Province.

Faced with the huge gap in housing prices, Chinese local government has adopted various measures to control real estate market to minimize the negative impact of excessively rapid housing prices on people’s lives. Meanwhile, efforts are also being made to promote the development of small cities and rural areas so that people can increase their motivation to make a living at their hometown.
Philippines Market: Shadow of the Pandemic has not yet Dissipated
The Philippines’ real estate market has grown exceptionally since 2010. It experienced its price boom when the Makati Central Business District (CBD) price rose by 132% in 2010-2018. In 2019, the real estate market ended the year strong with a local year-end report from Lamudi, a real estate property platform, stating that property seekers were more interested to buy (60.59%) than rent (39.41%) housing properties. Residential rates around Metro Manila rose by 1.9% quarter-to-quarter by the end of 2019, according to Colliers, commercial real estate brokerage professional services and investment management company.

There are various reasons for the demand of real estate in the country, which fuels the market to continue growing: the continued rise of foreign investors and BPOs, continuous supply of flexible workspaces, increased number of Chinese buyers, and high remittances of Overseas Filipino Workers, which equates to more families having enough purchasing power to buy and invest in residential lands and markets. However, the US-China trade war and the slowing local economy has put a toll on the real estate sector. And with the COVID-19 pandemic, analysts project a weakening demand for property and stalling new projects as community lockdowns continued to be imposed across the country, especially in Luzon region, where businesses and its capital, Manila, is located.
Developers experienced a drop of around 30% on sales in 2020 as the country battled the pandemic, and imposed the world’s longest and strictest lockdown. The first quarter of 2020 survey shows pre-selling real estate units were down compared to the same quarter of 2019. According to Bangko Sentral ng Pilipinas, the county’s central bank, though condominium prices rose to 23.6% year-on-year, with prices in urban areas in Metro Manila rising faster at 28% in March 2020, these figures were just “spillover” of the 2019 demand, a report from PhilStar said.
In a 2020 projection of Lobien Realty Group (LRG),one of the fastest rising real estate consultancy companies in the Philippines, declines in space rentals, including retail, is also inevitable this pandemic as businesses are halted. There was a decline in Philippine offshore gaming operators or POGOs, which have been occupying 1.14 million square meters of office space since 2016. The Business Process Outsourcing industry (BPO), another greatly hit sector, was also seen scouting other provinces as mean to veer its way out of the hard-hit COVID metro and into the provinces, which also provide competitive rental rates and lower labor costs.
With regards to its residential market, low-cost shelters were the biggest victims of the pandemic. With migrant workers – its biggest clients – come home in volume and often jobless, it is understandable that realtors and banks conduct reassessments of home loans. On average, Filipinos need of Php 34, 962 (USD 680) to afford the minimum amortization of Php 10, 000 (USD 200) for a housing loan worth Php 2 million (USD38,800), accommodating loan rates of 90% LTV, with an annual interest rate of 5.375%, and a loan tenor of 30 years. However, those who can afford these housing loans are already the ones which have existing houses.
Though the government provides subsidized housing less than Php 450, 000 (USD 8, 700) with a monthly amortization of php 2, 302 (USD 45) with fixed rate of 3% for 30 years under the Pag-IBIG Fund (country’s government-owned and controlled corporation providing housing loans), it would still be too much for a regular Filipino who are struggling to make ends meet especially this time of pandemic.
The government has been easing its guidelines for loans and interest rates in real estate as means to balance the economy and keep the market afloat. Analysts are projecting that the real estate market in the country is resilient, and can bounce back in 2021. The Philippines’ Central Bank is projecting a strong recovery of 7.8% percent growth this year. Despite COVID-19 in 2020, Lamudi recorded its highest page views for houses and lands with 33.03% and 30.24%, respectively; Condos with 5.37%, and foreclosed properties with 16.86% hike from the first quarter to the second quarter to 2020.

Social Impact of the Global Rise in Real Estate Prices
In the Post-COVID-19 Era, it is not only housing prices that have been affected and changed, but also social production, people's lifestyle and even their concepts.
Firstly, gap among different countries and within each country will be further widened, which will seriously affect social stability and people’s well-being. Caused by increasing inequality, extreme emotions and criminal behavior may rise, so more risks need to be guarded against.
Secondly, due to the pandemic, there will be a shift in how real estate properties will be built and developed. Landlords and developers should consider sustainable and wellness-oriented developments as prospective home owners and tenants become more conscious about the impact of real estate into the well-being of their employees.
Last but not the least, the Pandemic may also bring about positive changes in concepts. People pay more attention to healthcare, cherish physical and mental health. Climate and environmental protection are valued, and people start to learn how to coexist harmoniously with other species. No matter buying a house or not--to gain a sense of stability or to avoid heavy loans, people are having a clearer understanding and planning of their lives than before.

