{"id":29357,"date":"2016-10-10T17:25:41","date_gmt":"2016-10-10T10:25:41","guid":{"rendered":"http:\/\/www.siamlandbank.com\/propertynews\/property-news\/how-davao-became-hot-property-in-the-philippines\/"},"modified":"2016-10-10T17:29:18","modified_gmt":"2016-10-10T10:29:18","slug":"how-davao-became-hot-property-in-the-philippines","status":"publish","type":"post","link":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/how-davao-became-hot-property-in-the-philippines\/","title":{"rendered":"How Davao became hot property in the Philippines"},"content":{"rendered":"


\nDuterte\u2019s former stronghold goes from strength to strength as Manila property firms pivot south
\nImage: Dmitry Kaminsky\/Shuttershock
\nTo witness how Davao stands out, a visitor only needs to be there on New Year\u2019s Eve. Thanks to a firecracker ban, revellers toot horns and clang pots. It\u2019s a little less exciting than before, but at least the city avoids the wave of injuries suffered elsewhere in the Philippines.
\nThe ordinance was the brainchild of Philippine president and former mayor of Davao Rodrigo Duterte, whose single-minded stewardship of the main city on the southern island of Mindanao was seen as being instrumental to his rise to national prominence.
\nDuterte instituted several policies that not only beefed up security in the city but also raised its game in terms of competitiveness. The local government imposes a 72-hour deadline on processing business permits, a rarity in a red-tape-ridden country, and implements a city code of fiscal incentives, previously unheard-of in the region. In their joint \u201cDoing Business\u201d report, the International Finance Corporation and World Bank cited Davao as the most efficient city in the Philippines to obtain construction permits.
\nThis Unique business climate has made the city a favourite of property developers and investors nationwide. The city is in the throes of a real estate boom with 5,600 residential units in its supply pipeline, according to Jones Lang LaSalle.
\nDavao is known for its beautiful beaches. Image: Mark Onod\/Flickr
\nGlenn Villarico, a 32-year-old banker, made an investment at an early stage of the upsurge. In 2008, he purchased a PHP2million (USD41,000) unit in one of the first condominium blocks built in the city by a Manila-based developer. He expects the apartment, now valued at PHP4million (USD83,000), to yield at least PHP30,000 (USD621) a month in rental income.
\nMore: How Duterte\u2019s federalism could diversify the Philippine property sector
\n\u201cDavao was asserting itself when I bought,\u201d he said. \u201cThere are so many resources to tap and the cost of investment is way cheaper than in Cebu or Manila.\u201d
\nA year earlier, Manila-based property development giant Ayala Land announced a joint venture with Davao developer Anflo Management and Investment Corp (ANFLOCOR) for a mixed-use project that included Abreeza, the first Ayala mall outside Luzon and Cebu, the two traditional island powerhouses in the archipelago.
\nIn its wake, other real estate influencers are turning their gaze south. SM Prime Holdings opened a second, bigger, mall in Davao. Torre Lorenzo partnered with Thailand\u2019s Dusit Thani hotel chain for a PHP2-billion (USD41 million) serviced apartment project. Other firms, meanwhile, including DMCI Homes, Filinvest Land, Megaworld Corp, Robinsons Land, and Vista Land, are launching housing projects around the city.
\n\u201cThe increase in development in Davao is really because of the decrease in take-up in Manila,\u201d said Julius Guevara, director for research and advisory at Colliers Philippines. \u201cThe strategy of developers is to look at secondary markets because the opportunities are decreasing in Manila.\u201d
\nNo more firecrackers\u2026 but the party\u2019s just starting for Davao. Image: Karve\/Shutterstock
\nHomegrown firms are rising to the occasion. ANFLOCOR subsidiary Damosa Land has sold four of six condominium towers in its PHP1-billion (USD20.7million) Seawind project, launched in 2015. FTC Group, on the other hand, is currently constructing the 33-storey AEON Towers, slated to be Davao\u2019s tallest structure.
\nVertical condominium developments are designed to appeal to overseas investors due to the country\u2019s rules on foreign investment with freehold of landed houses forbidden. \u201cBy building vertical you can sell up to 40 percent of your units to foreigners,\u201d Damosa Land vice-president Ricardo Lagdameo said. \u201cIt is something we are taking into account with our future projects.\u201d
\nCapital gains have been spectacular, with values in Damosa Land\u2019s residential property developments shooting up by at least 30 percent in the last three to four years. Although experts claim the market is not overheating, Lagdameo hopes prices will stabilise. \u201cWhile we would like the prices of our projects to continue to appreciate, it would be healthy if they were to at least gradually slow down.\u201d
\nMore: Two Philippine fast-food titans team up to build a shopping mall empire
\nIt is Filipinos, not overseas buyers, who are driving prices upwards. \u201cIn the country there are a lot of promising entrepreneurs and businesspeople,\u201d says Lagdameo. \u201cYoung people with purchasing power are starting to buy up real estate.\u201d
\nCall centres and other business process outsourcing (BPO) companies are flourishing in Davao, contributing further to the overall feeling of prosperity in the city.
\nAs such a titanic figure, it is understandable that Duterte\u2019s shadow looms large over Davao. Indeed the mayoralty continues to be a family concern with Sara Duterte, the president\u2019s daughter, succeeding her father. Where critics see nepotism, others appreciate the continuity of the succession. \u201cInvesting in Davao City before was profitable. Investing now is lucrative,\u201d says Villarico.
\nDavao, and indeed Mindanao as a whole, is set to benefit from some major infrastructure changes. The president himself is pushing for a 2,000-kilometre railway network that would link Davao with other cities including Butuan, Cagayan de Oro, General Santos, Iligan, and Zamboanga. \u201cAs property developers, we\u2019re looking forward to the infrastructure that\u2019s going to be built over the next couple of years,\u201d Lagdameo said.
\nDuterte\u2019s election was, in no small part, due to Davao\u2019s remarkable success hitting a sweet spot with voters. And with the real estate market surging upwards, the city continues to make a loud noise in the Philippines \u2013 despite the ban on firecrackers.
\nRead next: Optimism in the Philippines is boosting the region\u2019s business sentiment
\n
\nSource : property-report.com
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