MANILA, Philippines – The luxury residential market in the Philippines will continue its upswing as foreign expatriates increasingly turn from rentors to buyers, according to property consultancy firm CBRE Philippines.
Rick Santos, chairman and founder of CBRE Philippines, said American, British, Japanese and other foreigners living in the Philippines are seeing the investment potential of the local property market, particularly condominium units, which they are allowed to own.
“The luxury residential sector will continue to pick up, with increasing demand from foreign expats,” said Santos at a press briefing on Wednesday, June 5.
Evidence of this is seen through the strong growth among the Philippines’ biggest property firms, he explained.
“Residential is selling at a modest pace for Ayala Land Inc; strong pre-selling phase for Century Properties Group; robust residential revenues from completed projects of Filinvest Land and; Megaworld is benefiting from an attractive landbank,” he said.
These are 4 of the biggest real estate developers in the country with portfolios that include high-end and luxury projects.
Brisk office demand
The rise of foreign firms opening offices in the country — attracted by the healthy economic growth rates, quality of workforce, and the size of the local market — has led to this growing expatriate population.
“The high figure of American dwellers in the country is linked with multinationals and American BPO firms locating in the country,” Santos said. BPOs refer to the burgeoning business process outsourcing industry that tap English-speaking, young and technically savvy Filipino workers.
The local economy, which is traditionally consumption-driven, is also attracting long-term investments that create jobs.
Santos said more Japanese nationals are locating here due to the increase in manufacturing and industrial establishments.
Positive investment sentiment is high as the Philippines post over 7% economic growth rates, win investment grade from global rating firms, and as the stock market reach feverish highs.
CBRE data showed that the expatriate population residing in the Philippines are:
- 49.31% are American
- 14.10% from the UK
- 7.11% from Japan
Of that, 42% are living in the Philippines on dual citizenship and 33% are immigrants by marriage.
Foreigners are not allowed to own land, but can buy condominium units.
OFWs, BPOs drive residential demand
Filipinos living or working overseas (typically called OFWs) as well as foreigners who opted to retire or pursue dual citizenship are also reaping the opportunities in the Philippine property market, said Santos.
Aside from this new market of foreign expats, OFWs and full time BPO employees have been sustaining the demand for horizontal residential projects, said Jan Custodio, senior director at CBRE.
Data from CBRE shows that the total housing needs in 2013 will amount to 646,128, of which 57% will come from new households who can afford to own or lease a residential property. This number will balloon to 7.5 million in 2016.
“This is the best property market we have had in the past 20 years,” Santos beamed.
“The democratization of the housing sector, brought about by low interest rates and affordable payment schemes are converting more Filipinos from renters to owners. Solid macroeconomic fundamentals, investor confidence, sound fiscal policies, and record low interest rates will sustain demand in the property market,” he stressed. – Rappler.com