Real estate is fastest-growing industry in Q3 – officials

Aya Lowe
Strong real estate growth fuels services sector growth in Q3, boosting the economy

BOOMING. Real estate projects, fueled by remittances and the outsourcing industry, contribute to economic growth. Photo by Franz Lopez

MANILA, Philippines – The real estate industry saw a revenue growth rate of 18.8% in the third quarter of the year, making it the fastest growing among all industries, said officials.

“Real estate posted strong expansion as major players including Ayala Land, SM Prime Holdings and Megaworld posted double-digit revenues in terms of real estate and rent of commercial spaces,” said Socioeconomic Planning Secretary, Arseio Balisacan, at a press conference on the Philippines’ third-quarter gross domestic product (GDP) growth on Wednesday, November 28.

According to Jose Ramon Albert, Secretary-General of the National Statistical Coordination Board, the country’s better-than-expected 7.1% growth in the third quarter was driven largely by services sector growth, which was, in turn, partly fueled by real estate, renting and business activity.

Comprising half of GDP growth, the services sector expanded 7% in the third quarter.

“We have previously noted that a major driver of this growth is the demand for office space due to the strong outlook of the BPO sector. Also favorable economic conditions led more individuals to purchase residential properties,” said Balisacan.

Aside from BPO, real estate growth was also buoyed by higher construction expenditures, said Balisacan.

“Spending for construction of physical capital increased by 24.3% in the third quarter of 2012 a huge turnaround from a negative 8.8% performance in the third quarter of 2011. Both private and public construction registered more than 20% growth rates during the period,” he explained.

Public construction grew 23.7% in the third quarter, reversing its 19% drop in 2011, while private construction expanded 25%, also reversing its 5.9% decline last year.

“Public spending on construction grew back by higher capital outlay of government 38.4% more for roads and irrigation projects. Most of these projects were implemented outside NCR in keeping with our objective of inclusive growth,” said Balisacan

“These figures just confirm that theres a lot of investment going on. While the growth of the economy is primarily consumption driven there are also investmetns coming in.”

 Major players and consultants have remained bullish on their real estate forecasts.

“It took 20 years to get the stars aligned but now we’re looking at sustained growth. We are now experiencing the best real estate market in the Philippines in the last 20 years,” Rick Santos, chairman and CEO of property advisory firm CBRE Philippines, previously said. – Rappler.com

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