The Philippine real estate is booming, despite the risks brought by the local economy, the recent pandemic, and a few other challenges. In this definitive piece, you will learn about the trends in Philippine real estate for 2020.
The Economic Landscape
This rising tiger in Southeast Asia is one of the prime destinations for foreign property investors from mainland Asia and the rest of the world. With a young demographic and the emerging middle class, there is no doubt that its capital, Manila, is poised to become one of the most in-demand locations for property investments in the near future.
Foreign corporations are the lead investors, and most of them are owning offices in key areas such as Cebu City, Metro Cebu, Davao City, and Metro Davao. Predictions about the local real estate industry are plenty. Remember that predicting how the market conditions will change isn’t very easy.
The Real Estate Market This Year
Economic experts are as one with the status of the real estate industry in the Philippines, and they say that it will remain strong in 2020. The supply and demand curves are at healthy levels, with increased investment demands from cities outside of Metro Manila.
The rise in the demand also comes from the increasing remittances from overseas, coupled with increasing operations in the outsourcing fields from foreign-based companies. Together, they benefit the local economy. The purchasing power of local professionals, particularly youngsters and the wealthier families in the country is contributing to the increasing demand for these properties. These are to consider the current economic landscape, which has seen the growth rate in the country dropping from a formidable eight percent to a steady five to six percent.
Moreover, the offshore gaming industry is also driving the market, both within offices and in residential areas. To review, in the year 2018, the gross revenue from the gaming industry increased by about 9.5 percent, representing a growing industry backed by the enthusiastic Chinese investor groups and gaming corporations. The outlook for the industry in 2020 is more positive than during the previous year.
Looking to buy a house? Read our comprehensive article on things to watch out for before buying a house in the Philippines
Where does the demand come from?
The key drivers of the demand for the real estate industry are:
- Business process outsourcing (BPO)
- Continuous supply of workspaces
- Demand from Chinese investors
- Increased remittances
Let’s take a look at each of these pointers, beginning with the BPO industry. Opportunities, whether for work or for business, in the BPO field are seemingly endless. It is now among the top drivers of the Philippine economy. Contributors here are the English-speaking population, the talented youth, and more foreign companies getting started in this industry in Manila and other cities such as Cebu.
Predictions reveal that the BPO industry will double in 2020 through exponential growth. Firms from the United States, the United Kingdom, and Australia are the top demands.
Secondly, the steady supply of workspaces in the Philippines is in competition with other nations in Asia. It has been said that by 2030, 30 percent of the entire office space will be flexible workspaces. During the time of the pandemic today, this has actually started. People are demanded to return to their homes and set up their home-based offices. Thus far, the responses are generally positive.
In the next three years, there will be a 30 percent expansion in this demand driver. Co-working spaces will not only benefit small businesses and digital professionals, but also multinationals in the country’s business districts — Makati, Mandaluyong, and the Bonifacio Global City — as well as outsourcing companies.
The third contributor to the demand for real estate is the Chinese community. These people from mainland China and from special administrative regions like Macao, Hong Kong, and neighboring countries like Thailand and Vietnam are getting interested in relocating and investing in the local real estate.
Fourth are the overseas Filipino workers or the OFWs. It is interesting to point out how a huge portion of the demand and the buyers of these real estate units come from the OFWs. Through the remittances, they contribute to the growth of the economy, valued at around USD 3 billion.
Travel around the Philippines’ capital, and the major cities and you will see high-rise buildings being constructed. Marketers and staff are still vigorously distributing flyers and brochures, opposite to what few experts have said about the real estate, that it is waning. With this action, you see a different vision.