Where to buy property: Follow LRT tracks
MANILA, Philippines - With the Philippine real estate market on a steady upswing and the country reporting a better-than-expected growth of 7.1%, now is the time to invest in property, said Jones Lang LaSalle’s COO, Lindsay Orr.
“The time is a good time to buy while the supply is less than the demand. It would have been better if you had bought a little while ago since prices have gone up a bit,” said Orr in an interview with Rappler's Business Editor Lala Rimando on TalkThursday.
Orr advises those looking to invest to follow the infrastructure and buy residential.
“It’s easier to invest in residential units. As for upcoming areas the capital region is expensive, but you have to look at where the infrastructure is going. The sensible thing to do is to look at the areas that will emerge in the next 3 to 5 years. Look at where the LRT (Light Rail Transit) lines will expand,” Orr advised.
Orr said the market has been continuing on a steady path with no risk of a bubble in the near future. “End user demand came up by 11 to 12% over the last 3 years. If they continue to roll out developments at an ever increasing rate then sooner or later supply will outweigh demand and you will have the start of a bubble situation,” said Orr.
“If demand starts to tail off then some developer will put their projects on hold,” he added.
Over the past 10 years the number of OFWs has risen to 10 million. They are now buying local property which has led to developers launching residential developments to meet the increasing demand.
“The residential sector is booming. Everywhere you look, you see high rise residential condos going up. The remittances are coming in fast and furious and a lot of that money is being spent on condos. We have seen increasing workforce employed in the Philippines sector with a remarkable expandable income and smaller units, which are quite affordable to the new middle manager class emerging,” said Orr.
Following their price range, the mid-range sector which accounts for developments priced between P1.5 million to P10 million makes up 97% of the developments built in the last 9 years, according to Orr.
A booming BPO industry is also fueling the commercial market and will continue to do so for the near future, he said. Because of the continued demand, Manila will see new central business districts (CBDs) emerge to accommodate the growing commercial supply.
“Traditionally the CBDs were Makati, Ortigas and more recently Fort Bonafacio but as space gets limited and prices go up a little bit, end users need to look at other areas. We now have 19 emerging business districts such and Mandaluyong and Quezon City,” said Orr.
The realty market is also seeing the growth of commercial hubs outside of Manila.
“The real estate prices in the provincial area are not a lot different than in the CBD and the capital region. It’s really a question of an abundant labour supply that’s why places like Davao, Bacolod and Cebu are becoming very popular because of the abundant potential labour pool,” said Orr.
More recently, the Philippine has been seeing increasing interest from banks to financial institutions bringing up the demand in the traditional office sector.
Watch the full interview below. - Rappler.com