Philippines projected bright spot in 2011
The Philippines is being increasingly tipped at a hot spot for real estate in 2011 as the country’s property industry will continue to be driven by strong demand for middle income apartments.
Strong interest from foreign buyers is also expected and developers are planning new launches well into 2014. The robust overseas Filipino market, record low interest rates, accessible financing schemes, and prudent lending standards are expected to continue.
David Leechiu, country head of global real estate services firm Jones Lang LaSalle, said that some 100,600 middle income condo units would be built in the next four years, accounting for 94% of the total projected supply. This is nearly double the 55,526 units constructed between 1999 and the first half of 2010.
‘In 2005, no one could have imagined how deep the mid-end residential condominium sector actually was. It will continue to be a source of growth for many developers up to at least 2014,’ he said.
Even in the middle of the global economic downturn supply in this market sector increased, up by 34% in 2008 from the year before, and by 26% in 2009. Growth is expected to surge by over 100% in 2011, before slowing down in 2012.
‘Growth will slow down but continue to expect seeing large volumes being available in the market,’ Leechiu added.
In agreement is Rick Santos, chairman and founder of property management group CB Richard Ellis Philippines. ‘The good days are back, the market is back because we have very good economic fundamentals,’ he said.
According to Steven Worboys, managing director of Experience International, a dynamic and progressive business outlook and a population committed to future prosperity will also make the Philippines real estate market strong.
He pointed out that another sector that is significantly boosting economic performance is the tourism industry. The Philippines attracts visitors from all over the world but it is becoming increasingly popular with the British.
Worboys expects tourism resorts to be popular among foreign property investors because of their relatively low prices and guaranteed annual income. His company’s project on Mactan Island has starting prices of $83,500 with 21% guaranteed annual income. In addition, 60% non-status finance is available and the resort will be managed by a world leading tour operator guaranteeing 80% occupancy.