The reasons to invest in real estate in Philippines:
Political stability in the next eight years — Whatever the eventual outcome of the sordid pork barrel/DAP controversies, President Noynoy Aquino won’t be impeached and there will be no military coups.
Economic stability — Arch foes ex-President Gloria Macapagal Arroyo in her nine years in power and her former Ateneo economics student, incumbent President Noynoy Aquino, have both overseen a prolonged era of economic stability and robust growth for the Philippines.
The huge backlog in housing — Up to now, there is still a huge demand for housing among the majority of the country’s over 100 million people.
Urban renewal — With economic growth and continued population growth, our major urban centers in Metro Manila, as well as big provincial cities, are undergoing urban renewal and redevelopments by local governments as well as by private developers like Megaworld, SMDC, Robinsons, Ayala, Century Properties, Vista, Filinvest, etc.
OFW bonanza — The huge inflow of foreign exchange earnings by legions of overseas Filipino workers (OFWs) continues and much of that money no longer just funds their relatives’ sari-sari stores, beauty parlors, jeepneys, and tricycles.
BPOs and call centers — The Philippines will continue to grow the booming business process outsourcing (BPOs) and call centers, which even politicos like US President Obama cannot stop due to irreversible globalization and our competitive edge.
Increasing foreign buyers — Political and economic stability, as well as the comparatively more affordable and relaxed lifestyle in the Philippines have attracted more foreigners to buy local condominium units. This positive trend will grow, since what we have seen in recent years is only the beginning and we still reportedly have the lowest foreign direct investments (FDI) in ASEAN, even compared to Myanmar, Cambodia, etc.
The stronger Philippine peso — A foreign investor mentioned to me that one advantage of foreigners investing in Philippine real estate is the relative stability and steady appreciation of the Philippine peso vis-à-vis the weakening US dollar.
Richer and stronger realty developers — The period leading up to the 1997 Asian financial crisis saw not a few property developers topple into oblivion. Today, most real estate developers in the Philippines are so much stronger and financially richer.
Tourism boom — The sunrise industry of Philippine tourism is poised for sustained growth in the coming years, benefiting the real estate industry with higher demand for new hotels, malls, buildings, resorts, golf courses and other ventures. Despite our impressive tourism growth in recent years, our tourism industry is still just a fraction of that of our neighbors like Hong Kong, Macau, Thailand, Singapore, and Malaysia.
Untapped China investor boom — In over a thousand years of good bilateral relations, the unnatural low ebb in Philippine-China diplomatic and political relations seems a temporary aberration. If the future situation gets better, we can hopefully woo some of the rising China foreign investments now going to ASEAN, the US, Australia and Europe. On July 9 Bloomberg.com reported: “Buyers from Greater China, including people from Hong Kong and Taiwan, spent $22 billion on US homes in the year through March, up 72 percent from the same period in 2013 and more than any other nationality, the National Association of Realtors said…
Infrastructure growth — The modernization of Philippine infrastructure is expected to accelerate and augurs well for the real estate industry, providing added impetus and more optimism, not only in Metro Manila, but also in other regions nationwide.
Low interest rates — The record low levels in bank interest rates will continue to encourage affluent people to take out their savings and shift them into real estate investments with stable rental incomes as well as good prospects for value appreciation. The low bank interest rates have also opened the doors to more professionals and families buying their first homes or real estate investments with housing loans. Realty developers with access to lower bank interest rates can also pass on this advantage to home buyers, either through bank financing tie-ups or even with their own flexible in-house financing offers. Wisely use credit to buy real estate now.
The Philippines residential property market continued to perform spectacularly, amidst robust economic growth. During the year to Q2 2015, the average price of a luxury 3-bedroom condominium unit in Makati central business district(CBD) surged 7.91% (6.61% inflation-adjusted) to PHP149,300 (US$3,179) per square metre (sq. m.), according to Colliers International.
During the latest quarter, condominium prices in Makati CBD increased 1.35% (1.1% inflation-adjusted) in Q2 2015.
The Gili Islands, Sabah, Danang, Ulaanbaatar and Yangon are Property Report’s picks for the year.
“Rich investors in places like Singapore and Hong Kong are looking at the prices in markets such as Vietnam and Sabah in Malaysia and saying, ‘for those prices it is worth a punt’,” says Nicholas Holt, Asia-Pacific research director at Knight Frank. “Unlike in the West where housing bubbles and recessions have taken their toll, real estate is still seen as a very safe investment here in Asia and speculators would rather see their money doing something productive than having it lie dormant in a bank account.”