Making moves beyond Metro Manila
In Part One of this four-part series, take a look at the rapid progress in the Philippines’ real estate sector, which is being seen outside Metro Manila. Can these secondary markets sustain such growth?
After a period of remarkable growth during which it has emerged as one of Asia’s most dynamic investment markets, the Philippines is continuing to capture wider attention. Promisingly, it is not just Metro Manila – the country’s political and economic powerhouse – that is proving enticing. Other markets such as Cebu, Boracay and Davao on the island of Mindanao are also healthy, despite slower-than-projected economic growth during 2015.
According to the country’s national statistics authority, real estate and construction constitute a combined share of 18.1 percent of real GDP. Yet, despite green shoots, issues that have traditionally plagued the sprawling island nation such as its creaking infrastructure and lack of transparency continue to be issues.
There’s still plenty of optimism to be found – much of it related to the prospect of imminent political change with elections slated for May 2016. Candidates and their affiliates have put modernisation at the centre of their platforms.
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Vice President Jejomar Binay wants to ease restrictions on foreign ownership to improve investment inflows, while Senator Grace Poe believes the tourism industry can further boost the economy and attract investment.
Manuel “Mar” Roxas III has spoken openly about improving infrastructure through public-private partnerships (PPP). Meanwhile, controversial Davao Mayor Rodrigo Duterte has pledged to crack down hard on crime in Metro Manila and around the country. Whilst these stances may not all be related to the property sector, they will all impact the investment climate – albeit indirectly.
Outgoing President Benigno Aquino has come under fire for not following through on his pledges. His championing of PPP projects, however, has been credited as a driver of real estate activity in secondary markets outside the capital.
“Those PPP initiatives will be tremendously beneficial in terms of future real estate developments,” says David Young, managing director of Colliers Philippines.
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While Young says that the Aquino government has given no specific legislative support to the real estate sector, he believes that slick presentation has been important in boosting the confidence of investors. .
“The perception abroad of the Philippines is changing,” he says. “People believe that the government wants to introduce transparency and that corruption is being addressed. It’s the whole tone and language that the government has adopted promoting the Philippines of late that’s been important.”
Yves Luethi, vice-president of marketing and landlord services at KMC Mag Group, an international affiliate of Savills, says the real estate boom can continue, but political commitment is a must.
“There is hope, but there’s no guarantee,” he says. “Their (the politicians) top priorities should be infrastructure, education and employment creation across all sectors. These factors will then hopefully trickle down to real estate.”
With around 7,500 islands in the Philippines, there are a lot of destinations to go around. And with property markets flourishing everywhere from the far south to the paradise islands in the Visayas, there has never been a better time to explore the options.
Come back tomorrow for Part Two.
This article originally appeared in Property Report magazine’s issue no. 135.
Source : property-report.com
Read more…A look at the Philippines’ emerging secondary real estate markets
