Transform with technology: Shaping the future of real estate

JLL’s first global report on the rapidly evolving real estate technology landscape.

The pandemic has provided us with an unparalleled opportunity, even a necessity, to rethink the built environment. The technologies that are now available – and others in the process of being developed – are set to radically reshape how we construct, interact with and use buildings.

The increasing deployment of technologies, from connectivity and hardware advances enabling the mass use of sensors to machine learning and artificial intelligence, now mean that nearly every aspect of the property industry has the capacity to evolve more quickly than ever before.

As the real estate industry rises to the challenge of delivering a significantly decarbonized built environment, technology is likely to be the single biggest catalyst for green progress.

Technology will also be essential as we seek to better manage space and its impact on people. Now more than ever, the health and well-being of the workforce are paramount to business success.

The new workplace, aided by technology, calls for more effective and dynamic use of space. This presents immense opportunity, but the proliferation of new technologies, new companies and new operating models has made it difficult to navigate the shifting landscape.

There is so much technology out there that businesses are often left overwhelmed. Where and when does a business start to invest in new technology and how do they know which area to prioritize?

This report aims to help organizations navigate the complexities of the proptech landscape and provide a strategic technology road map, so that firms can capitalize on those tech investments that will increase the value and benefit of buildings and the happiness of those who occupy them.

Transform with technology

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Source: JLL

Global House Prices Go Stratospheric!

During 2020:

• House price increases have been accelerating in many countries in Europe, Asia-Pacific, and the U.S. and Canada.

• Real house prices (i.e., prices adjusted for inflation) rose in 40 out of the 53 world’s housing markets which have so far published housing statistics. The more upbeat nominal figures, more familiar to the public, showed house price rises in 45 countries, and declines in only 8 countries.

• After an abrupt pause in H1 due to pandemic-related restrictions, transaction volumes in many countries recovered strongly in H2.

• New demand is coming from more properties being bought outside cities. Demand has further been boosted by record low interest rates, as well as quantitative easing.

• House prices have accelerated specially in developed countries, where mortgage finance is important.

• The North American housing market is booming. The Federal Housing Finance Agency's seasonally-adjusted purchase-only U.S. house price index rose by 9.42% y-o-y in 2020 (inflation-adjusted), the biggest y-o-y increase ever recorded, amidst strong demand and construction activity buoyed by very low interest rates and massive government stimulus spending. All this, despite the U.S. being the new epicenter of the coronavirus outbreak. Likewise in Canada, house prices in the country’s eleven major cities rose by 8.57% during 2020, in contrast to a y-o-y fall of 0.29% in the previous year.

• Strong house price surges have taken place in European countries, such as Slovak Republic, Turkey, Germany, Estonia, Sweden, and Russia.

• Asia-Pacific is gaining momentum, with notable performances from New Zealand, Sri Lanka, South Korea, Taiwan, Japan and China.

• The Philippines is now the worst performing housing market in our global house price survey, amidst a pandemic-induced economic downturn.

The International Monetary Fund (IMF) has revised its 2021 growth forecast for the global economy to 5.5%, an upgrade from its previous estimate of a 5.2% expansion, amidst accelerated vaccine distribution and the influx of new government stimulus efforts in many countries. The global economy contracted by 3.5% last year.

The strongest housing markets in our global house price survey during 2020 included: New Zealand (+16.77%), Sri Lanka (+15.47%), Puerto Rico (+14.59%), Slovak Republic (+14.28%), and Turkey (+13.7%), using inflation-adjusted figures.

The biggest y-o-y house price declines were in Makati CBD, Philippines (-16.11%), Egypt (-14.38%), Montenegro (-10.45%), Phnom Penh, Cambodia (-8.8%), and Qatar (-4.78), again using inflation-adjusted figures.

Momentum is stronger: 37 of the world’s housing markets for which figures are available showed stronger upward momentum during 2020, while only 16 housing markets showed weaker momentum, according to Global Property Guide’s research. Momentum is a measure of the “change in the change”; simply put, momentum has increased if a property market has risen faster this year than last (or fallen less).

Inflation-adjusted figures are used throughout this survey. In the case of Kiev, Ukraine, the Global Property Guide adjusts using the official U.S. inflation rate since Ukrainian secondary market dwelling sales are denominated in U.S. dollars.

The strongest performing markets:

New Zealand is now the strongest housing market in our global house price survey, with median house prices surging by 16.77% (inflation-adjusted) during 2020, up from a y-o-y rise of 10.28% in 2019 and its strongest performance since 2003. On a quarterly basis, real house prices increased by 7.62% in Q4 2020.

All figures that follow are inflation-adjusted.

Sri Lanka’s housing market is strengthening, with house prices rising by 15.47% during 2020, a sharp improvement from the previous year’s 2.46% rise. But in the capital city Colombo house prices have actually been falling, with demand shifting from the city centre to rural areas, amidst the COVID-19 pandemic. Quarter-on-quarter, nationwide house prices increased 14.34% during the latest quarter.

Puerto Rico’s housing market saw a strong rebound with the seasonally-adjusted purchase-only house price index rising by a record 14.59% during 2020, a sharp turnaround from y-o-y declines of 0.67% in 2019 and 9.74% in 2018, using inflation-adjusted figures. Quarter-on-quarter, house prices increased 3.1% in Q4 2020.

The Slovak Republic’s housing market is gaining momentum, with house prices rising by a huge 14.28% during 2020, a sharp increase on the previous year’s 3.34% growth, and the strongest y-o-y rise since 2007. On a quarterly basis, real house prices increased 3.27% during the latest quarter.

Turkey’s house price growth is accelerating, buoyed by strong demand from both local and foreign investors. The nationwide house price index surged by a record 13.7% during 2020, a sharp turnaround from the previous year’s 1.67% fall. But real house prices fell by 0.25% on a quarterly basis in Q4 2020.

THE WORLD'S REGIONS:

Europe’s great house price boom continues

Europe remains in full-fledged house price boom, despite the economic repercussions of the COVID-19 pandemic. Six of the ten strongest housing markets in our global survey are in Europe. House prices have risen in no less than 21 of the 24 European housing markets for which figures were available during 2020.

The Slovak Republic is now the strongest housing market in Europe, with house prices rising by a huge 14.28% during 2020, a sharp improvement from the previous year’s 3.34% growth its strongest y-o-y increase since 2007. On a quarterly basis, real house prices rose 3.27% during the latest quarter. Despite the pandemic, property demand, both from local and from foreign investors, remains fundamentally strong.

The Slovak Republic’s economy contracted by about 5.9% during 2020, in contrast to expansions of 2.4% in 2019, 3.9% in 2018 and 3% in 2017, as the COVID-19 pandemic delivered a heavy blow to economic activity. The European Commission expects the Slovak Republic to grow by 4% this year and by another 5.4% in 2022. The National Bank of Slovakia has a more optimistic forecast of a 5.7% expansion this year.

Turkey’s housing market continues to grow stronger, buoyed by strong demand from both local and foreign investors. The nationwide house price index surged by a record 13.7% during 2020, a sharp turnaround from the previous year’s 1.67% y-o-y fall. Yet on a quarterly basis, real house prices fell by 0.25% in Q4 2020.

For foreigners, Turkey’s currency devaluation means that the property market is very attractively priced, luring many buyers from the Gulf. In 2020, home sales surged 11.2% y-o-y to nearly 1.5 million, exceeding the previous record of 1.41 million units set in 2017, according to the Turkish Statistical Institute (TurkStat). Turkey’s economy grew by 1.8% y-o-y in 2020 – emerging as one of the few countries globally to avoid a contraction due to the pandemic. The economy is expected to grow strongly by 6% this year, according to the IMF.

Germany’s house price boom continues strong. The average price of apartments rose by 11.42% during 2020, at par with the previous year’s 11.15% growth. On a quarterly basis, house prices increased 2.29% in Q4 2020. Demand for residential property in Germany remains strong, buoyed by low interest rates, urbanization, and healthy household finances. In recent years, the migration crisis and strong economic growth have added to already strong demand. Despite the pandemic, residential construction activity continues to rise. In the first eleven months of 2020, dwelling permits rose by 4.8% y-o-y to 294,739 units, following 1% growth in 2019, according to Destatis.

Germany’s economy contracted by 5% in 2020, less than expected and a smaller decline than the 5.7% contraction recorded during the global financial crisis, as massive government stimulus measures helped lessen the impact of the COVID-19 pandemic. The European Commission expects the German economy to grow by 3.2% this year.

A surprising turnaround was also seen in the UK, with real house prices rising robustly by 5.56% during 2020, in contrast to the previous year’s 0.58% decline and the market's strongest performance since 2013. Quarter-on-quarter, real house prices rose 2.26% during the latest quarter.

In London, real house prices rose by 5.3% (inflation-adjusted) during 2020, in contrast to a fall of 3.2% in 2019; however while house prices rose in outer London they fell in inner London. All other regions also saw house price rises during 2020. East Midlands saw the biggest growth, with house prices rising by 7.6% (inflation-adjusted) during 2020, followed by Outer South East (7.08%), North West (7.07%), Yorkshire and Humberside (6.71%), and West Midlands (6.47%).

Yet the UK economy is struggling, with real GDP contracting by 9.9% in 2020, the biggest annual decline on record according to the Office for National Statistics. The IMF recently downgraded its 2021 economic growth forecast for the UK to 4.5%, down from its initial projection of 5.9% growth.

Other strong European housing markets include Estonia, with house prices rising by 10.37% during 2020, Sweden (9.79%), Russia (9.14%), Vienna, Austria (8.06%), Netherlands (7.33%), Portugal (6.2%), Norway (5.75%), and Denmark (5.37%). All recorded positive quarterly growth during the latest quarter (Q4). All, except Portugal, had stronger performances in 2020 compared to the previous year.

There have been modest annual house price rises in Jersey (4.97%), Malta (4.82%), Iceland (4.05%), Finland (4.01%), Kiev, Ukraine (3.65%), and Ireland (3.24%). All saw quarterly price growth during the latest quarter. All, except Jersey, performed better in 2020 compared to a year earlier.

European housing markets with minimal house price increases include Warsaw, Poland (1.78%), Switzerland (1.09%), and Romania (0.39%). Of these only Switzerland had stronger performances during 2020 as compared to a year earlier. Switzerland and Romania recorded a quarterly price increase during the latest quarter.

Europe’s weakest housing markets

House prices fell in only three of the 24 European housing markets for which figures were available during 2020: Montenegro, Latvia and North Macedonia.

Montenegro’s housing market condition is now rapidly deteriorating, amidst a declining economy. Prices of dwellings in new residential buildings plummeted by 10.45% during 2020, in contrast to the previous year’s 2.29% y-o-y rise.

Montenegro’s tourism-reliant economy suffered the worst contraction in the Western Balkans in 2020, with real GDP plunging by about 14.3%, in contrast to expansions of 3.6% in 2019 and 5.1% in 2018. The economy is projected to partially recover this year.

Latvia’s housing market continues to cool with average apartment prices in Riga falling by 0.97% during 2020, following a slight y-o-y rise of 0.49% in 2019. Quarter-on-quarter, house prices in the capital city increased 0.6% during the latest quarter. The European Commission expects Latvia’s economy to grow by 3.5% this year, following a contraction of 3.5% in 2020.

North Macedonia’s housing market is now losing steam, with the nationwide residential property price index falling slightly by 0.13% during 2020, in contrast to a y-o-y rise of 4.08% the previous year. On a quarterly basis, prices fell 0.2% during the latest quarter. The economy is projected to grow by 5.5% this year, after contracting by 5.4% last year, according to the IMF.

The Asia-Pacific region is gathering pace

Ten of the fourteen Asia-Pacific housing markets included in our global survey showed stronger momentum in 2020 compared to a year earlier. House prices rose in eleven countries, with notable increases in New Zealand in Sri Lanka.

New Zealand’s house price rises continue to accelerate, buoyed by ultra-low interest rates, as well as limited housing supply. Median house prices rose by 16.77% during 2020, up from a y-o-y rise of 10.28% in 2019 and the market's strongest performance since 2003. On a quarterly basis, real house prices increased by 7.62% in Q4 2020.

Property sales in New Zealand surged 36.6% to 8,935 units during the year to December 2020, according to the Real Estate Institute of New Zealand (REINZ). In Auckland, the number of properties sold soared 66% y-o-y to 3,219 units. The limited supply of homes in the market is putting further pressure on prices. In December 2020, the number of properties available for sale fell by 29.1% y-o-y to 12,932 units – the lowest level of inventory since records began.

New Zealand’s economy is estimated to have contracted by 6.1% in 2020, in contrast to its robust performance during the past decade as the effect of lockdowns and travel restrictions associated with the pandemic hit. The economy is expected to recover this year, with growth of 4.4% forecast by the IMF.

Sri Lanka’s housing market saw nationwide house prices rising by 15.47% during 2020, a sharp improvement from the previous year’s 2.46% rise. But house prices are actually falling in the capital Colombo, because demand has been shifting from the city centre to rural areas, amidst the COVID-19 pandemic. The economy is projected to grow by 5.3% this year, after declining by 4.6% in 2020.

After several years of lacklustre performance South Korea’s housing market is strengthening, buoyed by falling interest rates. House prices rose by 8.51% during 2020, a sharp turnaround from the previous year’s 0.53% growth and its highest growth in 14 years. During the latest quarter, house prices increased 4.32% from the previous quarter. Foreigners have been buying more properties in South Korea in recent years, though the country has a reputation of not being easy to navigate. The housing market is unusual, with huge key money deposits (the Chonsei system), and significant government intervention. Yet judging by results this is a well-run market. It has been stable since the 2007 crisis.

South Korea’s trade-reliant economy is projected to grow by 3% this year, according to Bank of Korea (BOK), after contracting by 1% last year – its first decline in 22 years on the back of the COVID-19 pandemic.

Other strong Asia-Pacific housing markets include Taiwan, with house prices rising by 6.44% during 2020, Tokyo, Japan (6.05%), and Beijing, China (6.01%). All had stronger performances in 2020 as compared to the previous year, as well as quarterly price growth during the latest quarter.

Modest to minimal house price rises were seen in Thailand (3.08%), Singapore (2.16%), Pakistan (1.6%), Macau (1.25%), and Hong Kong (0.66%). All, except Thailand and Hong Kong, performed more strongly in 2020 than a year earlier. Also, all except Thailand and Hong Kong, saw house price rises during the latest quarter.

Some Asian housing markets rapidly worsening

The Philippines is now the worst performing housing market in our global house price survey, amidst a pandemic-induced economic downturn. The average price of a luxury 3-bedroom condominium unit in Makati CBD plummeted by 16.11% during 2020, far worse than the previous year’s 1.03% fall. In fact it was the housing market’s worst performance since 1998. Quarter-on-quarter, apartment prices fell 8.7% during the latest quarter.

The Philippines experienced a house price boom from 2010 to 2018, with Makati CBD prices rising by more than 132% (76% inflation-adjusted) due to strong demand and rapid economic growth. But with a slowing domestic economy, coupled with the US-China trade war, the housing market slowed sharply in 2019. Further impacting the housing market the economy shrank by 9.5% in 2020, its biggest contraction since the Philippine Statistics Authority (PSA) started collecting data in 1946. The Philippine economy is expected to recover this year, with projected real GDP growth of 6.6%.

Cambodia’s housing market remains depressed amidst an oversupply of apartments and weak demand due to the pandemic. The average price of high-end condominium units in Phnom Penh fell by 8.8% during 2020, worse than the previous year’s 5.24% y-o-y fall. On a quarterly basis, prices fell by 1.59% during the latest quarter. Recently, the World Bank recommended that the Cambodian government should closely monitor the construction and real estate boom and curb speculation. The Cambodian economy is projected to grow by 6.8% this year, according to IMF forecasts, following a 2.8% contraction last year.

Indonesia’s housing market has hardly moved, with real residential prices in the country’s 14 largest cities falling by less than 0.1% during 2020, following y-o-y declines of 0.65% in 2019, 0.17% in 2018, 0.1% in 2017, and 0.63% in 2016. House prices fell slightly by 0.13% q-o-q during the latest quarter.

After two decades of uninterrupted growth, Indonesia’s economy shrank by 2.07% in 2020, in contrast to 5% growth in 2019. The government expects the economy to grow between 4.5% and 5.5% this year, a slightly more optimistic forecast than the World Bank’s recent projection of a 4.4% growth.

Middle East’s housing markets remain weak

The Middle East’s housing markets have been struggling for several years now, due to plummeting oil prices and the ongoing political and diplomatic crisis. Now, the coronavirus pandemic has aggravated the situation. The IMF has recently forecast 3.3% economic growth for the MENA region this year, not enough to fully offset the 3.8% contraction last year. In fact, four of the eight weakest housing markets in our global survey are in the Middle East.

Egypt’s housing market remains depressed, with the nationwide real estate index falling by 14.38% during 2020, far worse than the 2.28% y-o-y decline seen in the previous year. Part of the explanation is possibly the very high interest rates available on deposits in Egyptian Pounds. Real house prices fell by 0.95% q-o-q during the latest quarter.

President Abdel Fattah el-Sisi recently removed the last restrictions on foreign ownership of land and property in Egypt, in an effort to buoy the housing market. He also allowed the government, the biggest landowner in Egypt, to use its land for public-private partnership schemes. However house prices are being undermined by the vast amount of new construction, for instance in the new capital. On a positive note, Egypt’s overall economy has successfully weathered the adverse impact of the COVID-19 pandemic, with its real GDP rising by 3.5% y-o-y in 2020, according to the Institute of International Finance (IIF). In fact, Egypt is the only nation in the MENA that avoided a negative GDP growth last year. The economy is projected to expand by 2.8% this year and by another 5% in 2022, according to the IMF.

Qatar’s housing market remains weak, with the real estate price index falling by 4.78% during 2020, after the previous year’s minimal rise of 0.55%. Property prices fell by 3.39% q-o-q during the latest quarter. The Qatari economy contracted by about 4.5% last year, following almost zero growth in 2019, according to the IMF. The economy is projected to grow by a modest 2.5% this year.

Saudi Arabia’s housing market is still struggling, with the residential real estate price index falling by 4.63% during 2020, in contrast to the previous year’s 0.97% increase. Quarter-on-quarter, prices increased by a minuscule 0.42% during the latest quarter. The economy is projected to grow by a modest 2.6% this year, following a contraction of 5.4% last year.

The UAE’s housing market sufferings seem unending, amidst a huge supply glut of both apartments and oil. In Dubai, residential property prices fell by 2.93% during 2020, an improvement from the previous year’s 4.05% decline. During the latest quarter, house prices in Dubai increased slightly by 0.52% q-o-q. The UAE economy is expected to grow by an unimpressive 1.3% this year, following a slump of 6.6% last year due to a crude oil price crash caused by the COVID-19 outbreak.

Morocco’s housing market is gradually improving, with residential property prices rising by 1.08% during 2020, following declines of 1.75% in 2019 and 0.51% in 2018. During the latest quarter, house prices increased 2.98%. The Moroccan economy will expand by about 4.9% this year, partially offsetting the 7% decline last year.

Israel’s housing market is stabilizing, with the nationwide average price of owner-occupied dwellings rising by a modest 2.64% during 2020, an improvement from the previous year’s 1.18% growth. Israeli house prices were almost unchanged during the latest quarter. The Israeli economy contracted by about 5.9% last year, in contrast to an annual average growth of 3.5% in 2017-19. The economy is projected to recover this year with 4.9% growth.

The Americas: US and Canada’s housing boom continues

U.S. house price rises are accelerating and Canada’s housing market continues to grow stronger, despite the severe economic repercussions brought by the coronavirus outbreak.

The U.S. house price boom continues to strengthen. The Federal Housing Finance Agency's seasonally-adjusted purchase-only U.S. house price index rose by 9.42% y-o-y in 2020 (inflation-adjusted), up from the previous year’s 3.26% growth and the biggest y-o-y increase ever recorded. The S&P/Case-Shiller seasonally-adjusted national home price index rose by 8.89% during 2020 (inflation-adjusted), a sharp improvement from the previous year’s 1.37% growth. The FHFA index rose by 3.57% q-o-q during the latest quarter, while the S&P/Case-Shiller increased 3.27%.

Housing demand continues to rise strongly. Sales of new single-family houses surged 19.3% y-o-y to January 2021, to a seasonally-adjusted annual 923,000 units. Likewise, existing home sales rose by 23.7% y-o-y to January 2021, to a seasonally-adjusted annual 6.69 million units. New housing starts fell by 2.3% during the same period, while completions were up 2.4%.

U.S. homebuilder sentiment rose to 84 in February 2021, up from 83 the previous month, as low interest rates continue to buoy the housing market, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). Sentiment plunged to 30 in April 2020 when the COVID-19 pandemic shut down the US economy. A reading of 50 is the midpoint between positive and negative sentiment.

After contracting by 3.5% in 2020, the U.S. economy is expected to bounce back this year with GDP growth of about 5.1%, according to the IMF, amidst accelerated vaccine distribution and new government stimulus efforts. Last year, the federal government spent about US$3 trillion in emergency funding – equivalent to 15% of the country’s GDP.

Canada’s housing market is rapidly gaining momentum. House prices in the country’s eleven major cities rose by 8.57% during 2020, in contrast to fall of 0.29% during 2019. Quarter-on-quarter, house prices rose 2.43% in Q4 2020.

Demand has rebounded quickly with sales surging by 47.2% in December 2020 from a year earlier, the biggest y-o-y growth in 11 years, according to the Canadian Real Estate Association (CREA). For the whole year of 2020, home sales reached a new record of 551,392 units, up 12.6% from a year earlier, and 2.3% above the previous peak set in 2016. Residential construction is also increasing, with housing starts rising by 4.4% y-o-y to 217,802 units in 2020 and completions up by 6.1% to 198,636 units.

Despite a new surge in infections, the Bank of Canada (BoC) is still optimistic, projecting a full-year growth of around 4% in 2021 and close to 5% in 2022, following a contraction of 5.1% last year.

Latin America’s housing markets still fragile

Mexico’s housing market is slowing again, hit by the Mexican economy's 8.5% decline last year, caused by the pandemic, its biggest annual contraction since the 1930s, according to the National Institute of Statistics and Geography (INEGI). Now the ailing economy faces fresh headwinds due to the resurgence of coronavirus infections. The nationwide house price index rose by 1.79% during 2020, after growth of 4.58% in 2019 and 4.32% in 2018. On a quarterly basis, house prices increased by a minuscule 0.43% during the latest quarter.

Chile’s housing market is cooling rapidly, due to the economic impact of the pandemic. The average price of new apartments in Greater Santiago rose by 1.7% during 2020, sharply down from the previous year’s 7.32% growth. Yet on a quarterly basis, house prices increased 3.98% in Q4 2020. During 2020, new home sales in Greater Santiago area plummeted by 28.2% y-o-y to 22,672 units, according to the Chilean Chamber of Construction (CChC). Chile is projected to grow by 4.5% this year, following a decline of 6% last year, according to the IMF.

Brazil’s housing market remains fragile. In Sao Paulo, house prices fell by 0.7% during 2020, following y-o-y declines of 1.96% in 2019, 1.89% in 2018, 1.5% in 2017, 5.53% in 2016 and 7.38% in 2015. On a quarterly basis, house prices in Sao Paulo declined 2.12% in Q4 2020. The Brazilian economy contracted by about 4.5% in 2020, following expansions of 1.1% in 2019 and 1.3% in both 2017 and 2018. The economy is projected to expand by 3% this year, according to the World Bank.

Colombia’s housing market is still weak, after several years of vigorous price rises. In Bogotá, house prices fell by 1.12% during 2020, following a decline of 3.98% y-o-y in 2019. During the latest quarter, house prices increased 1.31% q-o-q. Colombia’s economy plunged by 6.8% last year, its first annual contraction in over two decades. The economy is now projected to grow by 4% this year.

Peru’s housing market remains weak, with house prices falling by 2.03% during 2020, following a y-o-y fall of 2.52% in the previous year. Quarter-on-quarter, house prices declined 3.51% during the latest quarter. The economy is expected to grow strongly by 7.3% this year, but still not enough to fully offset the 13.9% contraction recorded last year, according to the IMF.

South Africa’s housing market has hardly moved

South Africa’s housing market has been more or less steady, amidst a depressed macroeconomic environment. The price index for medium-sized apartments rose by a minuscule 0.4% during 2020, an improvement from the previous year’s 0.9% fall. On a quarterly basis, house prices were almost unchanged. The economy contracted by a huge 8% last year, following sluggish growth of 0.2% in 2019, 0.8% in 2018, 1.7% in 2017, and 0.4% in 2016. The SA economy is expected to post a modest growth of 2.8% this year.

Puerto Rico continues to amaze

Puerto Rico’s housing market saw a strong rebound with the seasonally-adjusted purchase-only house price index rising by a record 14.59% during 2020, a sharp turnaround from y-o-y declines of 0.67% in 2019 and 9.74% in 2018, using inflation-adjusted figures. Quarter-on-quarter, house prices increased 3.1% in Q4 2020.

The Puerto Rican housing market has suffered tremendously for most of the decade. The island has experienced a prolonged economic crisis, massive debt, high unemployment and continuing population loss. With US$70 billion in debt and US$50 billion in pension liabilities, Puerto Rico's bankruptcy filing in May 2017 was the biggest in the history of the United States. The economy is expected to remain weak with projected GDP growth of just 1.5% this year, following a contraction of 7.5% in 2020.

Source: Global Property Guide

Duterte Administration Builds Resilient, Decent Houses

Filipinos deserve not just better, but the best social services from the government.

The Department of Human Settlements and Urban Development (DHSUD) is bent on delivering quality service as Secretary Eduardo del Rosario vowed to provide low-cost housing projects for all Filipinos.

"Despite some birth pains, we have started laying solid foundations for the future of housing in our country," he said in an interview on Friday.

Del Rosario said it is crucial that President Rodrigo Duterte supports access to decent, safe, and affordable housing units in sustainable communities for the underprivileged and homeless.

Signed into law by Duterte on Feb. 14, 2019, DHSUD was created under Republic Act 11201 and was tasked to establish Housing One-Stop Processing Centers in regions to centralize the processing of housing-related documents.

Despite the challenges, the department strives to exercise its mandate under the Duterte administration’s flagship program Building Adequate, Livable, Affordable, and Inclusive Filipino communities (BALAI).

"The program aims to improve government efforts in addressing Filipino housing needs as well as to engage in the private sector. As chairman, I believe that we should all take the same stand and look in the same direction guided by BALAI Filipino," he said.

The DHSUD, along with its key shelter agencies (KSAs) -- the Home Development Mutual Fund (Pag-IBIG Fund), National Housing Authority (NHA), Social Housing Finance Corporation, and the National Home Mortgage Finance Corporation -- in coordination with the Human Settlements Adjudication Commission, formulated a national strategy to ensure the alignment of housing policies, programs, and projects.

"In keeping President Duterte's directive under the country's development goals, we want every Filipino, regardless of their social status ay magkaroon ng disenteng bubong na masisilungan, bahay na may maayos na kuryente at tubig (to have decent shelter and complete with electricity and water supply), a house that they can call their own and can be proud of," del Rosario said.

Del Rosario made sure all houses are in safe communities and "not prone to calamities or disaster".

Since its establishment, DHSUD has implemented policies, plans, and regulations related to land use and the creation of housing and development of homeowners’ associations (HOAs).

Services amid pandemic

Despite the Covid-19 pandemic, the DHSUD and its KSAs continued their work "so that the creation of their new department would be brought into purpose."

In 2020, the NHA provided 115,132 units, focusing on the needs of the low-income bracket and underprivileged households in urban areas.

Pag-IBIG Fund, meanwhile, boasts an all-time high financial statement in 2020 with PHP31.13 billion savings and PHP63.75 billion loan takeout, enabling a 93.68 percent basis of dividends for its members.

The DHSUD has facilitated the accreditation of 29 socialized housing projects and the approval of escrow agreements of 50 main condominium and subdivision projects.

As the pandemic rages on, DHSUD has a policy on loan moratoriums in housing finance and movement of deadlines and interruptions of periods for compliance with requirements, benefitting more than 5.5 million members.

The DHSUD also allowed the resumption of real estate activities, provided that strict health protocols must be observed.

Over 55,000 workers have returned to work and the construction of more than 400,000 housing units has resumed.

Local partnership

Del Rosario cited the huge contribution of local government units (LGUs) in the effective implementation of housing plans.

Work continued even amid the pandemic, with seven housing projects unveiled in December last year.

Memoranda of agreements (MOAs) with LGUs likewise paved the way for the construction of more housing projects and resettlement sites for informal settler families (ISFs) nationwide.

"These pacts are testament to President Duterte’s commitment in providing affordable and decent housing to underprivileged Filipino families and by establishing a strong bond with LGUs, DHSUD will succeed in reaching out and helping the majority of Filipinos who wish to have a house of their own," the housing czar said.

Del Rosario is eyeing to sign over 50 similar MOAs this year.

Beneficial partnership

The housing department also entered into partnerships with other government line agencies to boost various programs

Among these are deals are with the Homeowners Associations Federations and Confederations and the Department of Interior and Local Government (DILG); and the creation of a technical working group that will institutionalize the department's efforts to run after illegal developers and bogus brokers engaged in the illegal selling of real estate properties, through a joint MOA on anti-illegal real estate practices.

There were followed by the creation of the Anti-Illegal Real Estate Practices Inter-Agency Task Force, composed of the DILG, Philippine National Police, Department of Justice, National Bureau of Investigation, Land Registration Authority, Department of Environment and Natural Resources, and the Professional Regulation Commission, to push for an intensified whole-of-government approach against real estate scammers and illegal brokers.

Together with the Department of Agrarian Reform, the DHSUD rolled out housing projects for farmers, starting in Umingan, Pangasinan.

The agency and the Department of Transportation made sure ISFs hit by the ongoing North-South Extension Railway Project would be relocated properly.

To ramp up disaster risk management and climate adaptation efforts within localities, DHSUD has prescribed the land use planning and zoning standards for the formulation of Comprehensive Land Use Plans and Zoning Ordinances for local governments.

It has also partnered with various agencies to operationalize its mission on disaster preparedness and response, including the Covid-19 pandemic, Taal Volcano eruption, and the landslide incident in Naga, Cebu.

20-year housing roadmap

To sustain the initial efforts of the housing sector, DHSUD created a 20-year housing and urban development strategic roadmap dubbed “Sustainable Housing and Well-planned Community for all Filipinos” which aims to provide adequate and affordable houses for Filipinos.

Del Rosario said it will cover strategic plans and programs until the 2040, which is aligned with the "AmBisyon Natin 2040" development plan of the National Economic Development Authority, both representing the long-term vision and aspirations of Filipinos.

The national housing strategic plan, he added, is intended to accelerate the building of high-quality but affordable housing projects, in partnership with the private sector.

It also resolves the immediate housing needs of all ISFs.

Del Rosario said the 20-year strategic roadmap will ensure continuity of housing projects and urban development programs in the country beyond this year.

"The roadmap envisions better, greener, and smarter human settlements and urban systems in the Philippines with banner projects aiming to create spaces, transform spaces into communities, make communities accessible, and for affordable and empowered communities," del Rosario said.

Source: PNA