Despite the many upheavals in the Philippines, natural or otherwise, its economy continues to grow and the country's property market is still rising, although the pace is slower compared to 2012.The Philippine real estate industry experienced a boom in 2012 as the country had low interest rates and the economic growth was stable. Filipinos working abroad made investments in Pinoyreal estate, prompting the steady demand in the market. Foreign investments and the influx of offshore companies and the BPO industries contributed to the property demand as well.
The Philippines came into the limelight once again when it ranked on top of the list of destinations to watch out for in the year 2013 by Condé Nast Traveller Magazine and likewise made it to the list of hottest travel destinations in New York Times and Travel+Leisure Magazine.
ASEAN Integration 2015
The ASEAN Integration that is set to take place in 2015 will have a great impact in the Philippine real estate market.There will be a greater demand for residential, industrial and commercial space. New growth areas are expected to emerge as well. There will be expansion of business operations as they will have to go international, meaning there will be a demand for industrial properties and office space across the region.
Potential hotspots
With the proximity of some cities and provinces to the central business districts, potential hotspots are Davao City in Mindanao, the cities of Bacolod, Iloilo and Cebu in the Visayas, and Baguio City, Laguna, Batangas, Cavite and of course, Metro Manila in Luzon. Cebu real estate development closely follows Manila real estate trends, with many investors from rich Asian nations finding it very conducive to invest in the Queen City of the South.
Potential growth areas, according to economist CielitoHabito are General Santos and Cagayan de Oro in the south, San Fernando and Angeles City in Central Luzon and Iloilo in the Visayas.
Other real estate developments
The ASEAN Economic Integration will mean that there would be an increased need for residential real estate, particularly condominium units as more ASEAN travelers are expected, increasing tourism and related industries.
Currently the Philippines still imposes a ban on foreign land ownership. When the integration takes plan, the country will be pressured to remove the ban, which would significantly increase the country's foreign direct investment.
Prices continue to rise slowly
Compared to 2012, prices ofManila real estate properties today are still rising but at a much slower pace. According to Colliers International, the price increase of 1.2 percent in Q1 2014 was the lowest since Q2 2012.
In the Makati CBD, the average cost per square meter of a luxury 3-bedroom condominium unit was 136,533 pesos in Q1 2014, while a 3-bedroom condominium unit in Bonifacio Global City was 133,175 pesos on the average. The highest rate for the same quarter was at Rockwell Center, where the average per square meter cost was 140,178 pesos.
Real problems
The growth of the mortgage market in the Philippines is stunted. There are only a few major banks that offer housing loans. The terms and conditions of housing loans are very similar among banks, which offer limited choices to borrowers. Loan application approvals take a considerable amount of time. There are also problems that are faced in the land titling and registration processes.