Gas prices have skyrocketed in the last year. In the Philippines, gasoline prices jumped from P62.10/L to P85.47/L and diesel prices jumped from P43.94/L to P87.31/L. This kind of increase is worrisome.
In the last months, headlines have focused on this problem, how it is affecting the economy, and what the government is doing about it. It has impacted a lot of businesses and a lot of them are struggling to keep up with the rising costs.
How does this all affect the real estate market? The real estate market is said to be solid throughout the economic cycle. Is it really? We dig into what several experts have to say.
Consumers may hold off buying homes
High gas prices mean high prices of consumer goods. Everything is affected: prices of food, shipping costs, electricity costs, and basically everything else. This increase in costs means people can afford less and the economy is likely to slow down a bit. With this, people will likely hold off on buying their dream home, making a move, or making big investments. Instead, they will be focusing on getting through the current crisis.
Weary of High-Interest Rates
Aside from the high cost of living, a lot of people who are thinking of making real estate investments this year will be wary of high-interest rates. While the Philippine government promised to keep interest rates at bay, people are still wary. While interest rates have not soared, people will still hold off making big purchases in fear of looming a financial crisis.
Thinking Long-term
It’s not all gloom for the industry this 2022. As always, there is still economic growth and activity in the real estate industry. In the Philippines, there is still spending on real estate, especially on infrastructure. While this financial cycle may not be best for everyone, people will still come out of it. There are also a few investors who take advantage of this time to invest in real estate. At the end of the day, while the rising gas prices are scary, people in the real estate industry should still think long-term. There are still a lot of opportunities in the industry even in times when there are soaring gas prices and inflation.
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