Home Lamudi News Latest Investment Trends in the Philippines' Real Estate Industry

Latest Investment Trends in the Philippines’ Real Estate Industry

For real estate investors, 2019 presented major developments due to a host of factors, spanning environmental, social and governance-related, and disruptive technology.

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The country isn’t the only one dealing with most of the impediments in the real estate industry. In fact, as noted in the Emerging Trends in Real Estate Asia Pacific 2019 survey, the five issues leaning toward as the most problematic for real investors can be observed throughout Asia: low yields, lack of viable investment properties, possible trade wars, competition from Asian buyers, and impending interest hikes. However, rallying on through these tough times can be different for several contexts.

Seeing how the expectations for 2019 have panned out, the last quarter of the year might be a period of reflecting upon the ups and downs in terms of the Philippine real estate industry. Given that there are considerable instances of success in the market, what we should be mindful of are the trends that continue to direct the movements within this fickle sphere.

Areas Enabling Upward Mobility or Upgrade

Even if the industry itself faces several setbacks, the Philippine economy has been bullish with its growth and development in the past few years. With this, new developments have continuously been on the rise since the year started, bearing all the features that address the evident drive for changes in lifestyles – with most of the clamor coming from families wanting the upgrade.

A good example for this is the recent development in the Bay Area of Manila.  You can easily spot the upscale condominium projects in this area. As cited before, aside from potentials of upgrade, the Bay Area is being chosen due to its combination of leisure options, business districts, and accessibility.

Affordability and Accessibility

In the Emerging Trends in Real Estate Asia Pacific 2019 survey, a surprising statement has been raised: “If core prices are now too high for many investors to buy, what are the alternatives? For some—and probably increasingly so—the answer is nothing at all.” You may think that this appears to be the end-all and be-all for the industry, but it was acknowledged that there are still many ways to spend or manage these unused funds. For those who still have funds sitting in the real estate market, according to the survey, most of the investors believe that the returns will most likely be around as low as 5-10% to as high as 15-20% for this year. 

Given that there are pressing issues like these, together with the lack of investable properties and impending interest hikes, a few of the development efforts reflect how these are addressed. Many key locations in Metro Manila have been preferred by investors because of the combination of cheaper rental rates and accessibility. Quezon City is one example of this location since according to businesses as reported in Collier International’s Q4 2018 Office Report, “the rental rates are 20-30 percent cheaper there.” In addition, with the imminent completion of MRT-7, with majority along Quezon City, locations near stations are sure to be in demand in the coming months.

Flexible Spaces

Flexibility was said to be “the name of the game” for real estate in 2019, a notable forecast made by Colliers as part of the Top 10 Forecast for 2019 report. The scenarios for both commercial and residential spaces are quite similar when it comes to this projection – flexible workspaces and flexible residential projects are key to naming success in real estate projects. 

With the growth of coworking or shared workspaces, together with the mushrooming population of employees of Chinese offshore gaming companies, investments on developments offering flexibility.

Respite from the Crowded Metro

If you are eyeing the opportunity to invest in residential properties belonging to areas other than Metro Manila, it is best to explore your options now. According to Lamudi’s Residential Supply and Demand Review for Q4 2018, fringe areas are also getting significant attention. 

To get some aspect of the big picture, for condominium properties, the Lamudi review also noted that top cities with most page visits, searches and leads for this type of property on the Lamudi site in the last quarter of 2018 include Dauis, General Trias, Bacolod, Taytay and Talisay. This quickly paints a picture of the growing interests when it comes to residential options in the country. Other areas that can attest to this shift away from the metro include Clark, Pampanga and Cebu City; being part of the so-called “emerging cities” in the Philippines. Given that the administration is also highly regarding decentralization, plans on investing in real estate projects in the fringe areas can be worth the time and money.

Locations of Infrastructure and Tourism

It is almost common knowledge that this administration is gearing towards better infrastructure with the Build, Build, Build scheme. Most of the projects now are utilized and have shown some improvement in terms of movement and convenience. If you are looking into infusing more funds for investing in real estate, it will be best to explore options in areas where existing and potential infra projects are located.

Of course, as part of the infra projects, development of roads and highways is given much attention under the current administration that further promotes tourism. In a recent forum, DataLand, through its Vice President for Sales and Marketing, expressed how they saw the value of “shared prosperity” – with Palawan as an example of how they pursued “real-estate ventures in line with promoting the province’s ecotourism sector.”

Knowing all about these specific facets can be helpful for the proponents in the real estate industry, investors and firms alike. These are matters that should be taken into consideration whenever decisions need to be settled. Of course, you also need to be on the lookout for venues where these key insights can be discussed thoroughly and with the help of seasoned practitioners in the field. 

The Outlook Conference 2019

The OutLook 2019
The Outlook 2019, an annual awarding ceremony organized by Lamudi Philippines.

Property investments remain worthy and attractive for both local and foreign investors. This statement from Rizany Irwan Muhamad Mazlan, deputy chief of Mission of the Embassy of Malaysia reflects the confidence in foreign investing sentiments:Philippines’s strong economic fundamentals backed by its attractive demographic profile, puts the country’s development potential in the spotlight.” The country is still rallying on when it comes to the competent real estate market, flourishing amidst adversities in the economic sphere.

One of the vital gatherings that will delve into this issue is The Outlook Conference, which will be held on October 17 at the Makati Shangri-La. This annual event gathers all real-estate professionals “to understand the modern-day property-seeker and better their services and products to fit the consumers’ changing needs.” 

Real estate companies who would like to send representatives to the annual event, which will look to highlight key trends and initiate essential conversations on the current state of the property sector, may send an email to theoutlook@lamudi.com.ph.

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