RIDING THE BOOM
Manila Standard Today
By: Carla Montel
26 Apr 2013
HIGH with the bullish performance last year,the real estate industry is looking forward to continued growth in 2013. The upswing trend is apparent over the last 20 years with prospects looking even brighter due to the strong demand from a broader market. In this current environment, the real estate industry looks vibrant offering lots of opportunities to both to property developers and buyers.
The recent boost in real estate industry has been largely attributed to the strong demand for properties.With overseas Filipinos’ primary motivation of owning a home and initiate business ventures, the residential and office segments stand to expand in terms of units sold and occupied. The housing market remains lucrative for industry players with close to 100 million Filipinos and still rising population requiring living establishments.
The best real estate developments are the ones able to cater to Filipinos’ demands for comfortable and affordable homes, and ample office spaces with competitive pricing, amenities, and best locations.
In the recent years, the movers in the real estate developers, banking industry, and concerned government agencies made properties affordable and accessible for buyers: prices are stable, housing loans are readily available, lending and interest rates are low, and payment terms are flexible. These served as incentives for buyers, mostly empowered by the remittances of overseas Filipinos, to look into the property market and confidently, make a purchase for personal or investment reasons.
Another observation is the increasing preference to high-rise apartments in proximity to business and commercial centers. Buyers are purchasing affordable condos and are being accustomed to living in high-rise apartments akin to their housing experience in other countries. In response, developers are making sure that condo units are available and within reach of the buyers’ preference capability to purchase.
According to CBRE Philippines estimates, “300,000 households in Metro Manila can afford a condominium unit priced at least PI million.” In many cases, the monthly rental fees of housing units are at par, if not, of competitive rates with housing or condominium units that are readily available in die market.
For buyers, another enticing feature of condo living is the amenities being bundled by real estate developers. From improved security measures and facilities, leisure and relaxation facilities or function rooms, proximity to schools, hospitals and churches, real estate developers are mostly trying to outdo competition by offering a wide variety of features to suit the lifestyle of Filipinos nowadays.
It was reported that approximately 27,800 units of residential condos were purchased last year, representing 167 real estate projects in Metro Manila. Condominium projects were projected to multiply in the following years as the growing population continues to be empowered by the developing economy.
In the same manner of condominium units, office space rentals are on the upside despite the slowdown in the US and European markets. It was reported that the average occupancy rates in office spaces are close to 96 percent from the first quarter of last year. One off-shot effect of this rising demand is the resurgence of pre-leasing of office spaces. It was estimated that “383,000 square meters of projected office space to be offered , about 130,000 square meters are already pre-committed by the end 2012,”
The strong growth of the BPO industry increases the demand for rental or sale of residential properties within the proximity of these firms. The sale of small and affordable condominium units such as those of SM Development Corp. caters to call center agents and students segment of the market. Rental of commercial spaces in places near BPO firms are also big opportunities for developers and investors for further expanding their investments.
A recent study entitled “2013 Emerging Trends in Real Estate” of 22 cities in Asia Pacific sponsored by the prestigious nonprofit organization, Urban Land Institute (ULI) confirmed that the increased attractions of Manila in terms of both investment and development prospects. Respondents of the study are investors, developers, property company representatives, lenders, brokers and consultants.
These investment prospects drives the demand from multinationals and other local companies for more office spaces and recreational facilities geared for the tourism industry. Complimented by the government’s tourism promotions that in turn increased foreign visitor arrivals, more investments in luxury developments are expected in the major tourist destinations in the country.
High-end developments are expected in Cebu, Boracay, as well as Palawan, as these areas are among the top tourists’ picks in the country. Other places of interest are Bohol, Camarines Sur, Surigao Del Norte, and the Panay and Negros Island, considered “spill over” destinations but show massive potential in the tourism industry.
The sale of new units or inventory of high-end development projects in tourist and non-tourist areas is a strong market to serve and will definitely further boost the real estate industry.