On the rise
Riding the momentum of its stellar performance last year, the country’s property sector is projected to continue to soar despite the forecasted deceleration of real estate in several Asian countries.
The growth is still ascribed by some to the 7.2% growth that the country posted last year, which enabled more Filipinos to afford the purchase of properties.
“Demand for affordable housing will continue to outpace supply. Liquidity in the country remains high. As a result, domestic savings have also gone up,” said PROFRIENDS President Jocelyn Guzman in a previous interview with Business World. “Filipino families are now, more than ever, ready to commit to owning a home and have the means to do so,” she said.
Based on a recent survey of official house price statistics for 2013 conducted by research Web site Global Property Guide, the global house price boom continued to accelerate during 2013, led by the US and Asia Pacific.
The survey revealed that the Asian housing markets remain upbeat. “The Philippines is the fourth best performer in our global house price survey. The average price of three bedroom condominium units in Makati CBD surged by 10.56% during 2013, after annual increases of 4.85% in 2012 and 2% in 2011, and declines of 0.43% in 2010, 5.87% in 2009 and 1.65% in 2008. Quarter on quarter, house prices rose by 1% in Q4 2013,” the report said.
According to the Bangko Sentral ng Pilipinas: “Demand remains strong, as indicated by soaring real estate loans. In September 2013, the volume of real estate loans rose by 38.5% year on year to P776.65 billion (US$17.43 billion).”
Also bolstering the sector’s rosy outlook is the opening of integrated, mixed use centers in areas outside Metro Manila. The construction of these establishments will contribute to the influx of business process outsourcing (BPO) firms and other foreign investors. This will drive already established companies to remain in the country and even expand, according to commercial real estate consultancy CBRE Philippines.
These lifestyle centers, like those in central business districts (CBDs), will house offices, restaurants, parks, and recreational and shopping establishments. The report added that vacancy rates in CBDs further went down to below 3%, and BPO revenues will reach $16.5 billion by yearend. These factors will also con tribute to the already increasing demand for quality office spaces, particularly those outside of the metropolis.
“We see expansionary growth in Metro Manila’s fringes and provinces such as Clark, Metro Cebu and Mactan,” said Rick Santos, chairman and founder of CBRE Philippines, at the Euromoney Conference held recently in Pasay City. “Developing these areas will provide more job opportunities for people within and in neighboring places.”
Both Clark and Metro Cebu are globally ranked as among the top BPO areas, with the latter belonging to the 10 best outsourcing destinations. Competitive rates in the areas will also drive foreign investors to conduct business there, according to CBRE’s statement.
Meanwhile, Ms. Guzman said that she is optimistic that the economic condi tions would remain favorable to the property sector. “Even amid the global and re gional developments in the past months, the country has proven to be resilient as a result of good economic fundamentals that were instituted over the years,” she said.
By: Don Joseph J. Dejaresco, Business World, March 31, 2014