Recent years have seen an increasing demand for real estate from the foreign market. Being one of the faster growing emerging markets in the world, the Philippines is one of the countries investors look to for excellent investment opportunities. The significant increase in buying interest from the foreign market has steadily been growing as seen from the increased purchase of condominium units by foreigners, expats and corporations alike. But what is it really that makes Philippine real estate an excellent investment vehicle?
For one, studies have shown that the price of properties in the Philippines is one of the lowest in Asia. Although recent years have seen a rise in property prices in the Philippines, 2012 year end statistics show that these are still 86% lower than Hongkong and even 76% lower than India.
Property Prices in the Asian Region (price per square meter)
Taiwan $ 7,112
China $ 6,932
Thailand $ 3,282
Cambodia $ 2,913
Philippines $ 2,807
Malaysia $ 2,629
Indonesia $ 2,544
(Source: Global Property Guide)
2013 2nd quarter data show a rise in prices of high end residential properties in high end property districts.
3-Bedroom Luxury Condominium Price (per square meter)
Makati CBD had an increase of 12.92% year-on-year, at $ 2,938 per square meter;
Bonifacio Global City had an increase of 12.40% year-on-year, at $ 2,911 per square meter;
Rockwell Center had an increase of 10.60% year-on-year, at $ 3,030 per square meter.
(Source: Global Property Guide)
Another reason why the country is an excellent investment haven is the Philippine economy is rapidly growing and this sets the stage for property prices rising further. Gross domestic product (GDP) rose by 7.6% in Q1 2013 and 7.5% in Q2 2013 (Source: National Statistical Coordination Board) as compared to an average GDP of 5% for the previous years, and more growth is expected until the end of 2013.
Remittances by the approximately 9 million Overseas Filipino Workers (OFWs) are also boosting the Philippine real estate market with these OFWs buying low- to mid-priced properties in the outskirts of Metro Manila. The increased number of expats living in the Philippines has also increased the demand for more luxury residential condominium units in the upscale districts of Metro Manila.
Rental rates are also increasing, another factor that makes investing in Philippine properties an attractive option. 3-bedroom rental rates in the Makati CBD, at an average of Ph790 per square meter in Q2 2013, increased by 7.2%, quarter-on-quarter while rates the Bonifacio Global City area increased by 6% to average at PhP780 per square meter.
Add to that the increase in investments in the BPO sector which increases the demand for residential properties, both from the workers in the industry and the resulting increase in expat presence in the Philippines. All these factors combine to make the Philippine Property sector an excellent investment vehicle for local and foreign investors alike.
For more information on options available in the Philippine property market, contact me and let’s discuss how you can take advantage of this excellent investment opportunity.