Open AccessCOVID-19 pandemic and the Philippine real estate property cycle: indications of bubble and burst in the “new normal”?
Author(s) -
Luisito C. Abueg,
Christian Marvin Zamora,
Leonard Nevin Correa
Publication year - 2021
Publication title -
thephilippine review of economics/the philippine review of economics
Language(s) - English
Resource type - Journals
eISSN - 2984-8156
pISSN - 1655-1516
DOI - 10.37907/11erp1202jd
Subject(s) - real estate , recession , real estate investment trust , business cycle , unemployment , covid-19 , pandemic , economics , new normal , investment (military) , economic recovery , business , development economics , macroeconomics , finance , political science , medicine , disease , pathology , politics , infectious disease (medical specialty) , law
The Philippines has been one of the countries greatly affected by the COVID-19 pandemic. The country is regarded to be under the world's longest lockdown with an upsurge of cases, and it has also entered into an official recession with record-breaking economic contraction and high unemployment rates, fueling economic uncertainties. These macroeconomic indicators show serious signs of the adversities of the pandemic affecting the real estate development sector. As the real estate sector recalibrates its plans on response, recovery, and resiliency, this paper attempts to provide empirical evidence on the celebrated model in real estate economics proposed by Homer Hoyt and later developed by Glenn R. Mueller: the property cycle. We also provide contextualization on the property cycle empirics under the pandemic, given the sector’s reintroduction of the Real Estate Investment Trust (REIT). We argue that the REIT mainly supports the real estate development industry given the adversities of the pandemic and its accompanying recession, as well as an update to the long-term plans of the industry and its players in compliance with the “new normal”.