2017-06-27
5 Solid Reasons Why You Should Invest in Philippine Real Estate
- Advice
Due to the increasing demand for properties among the foreigners, Philippines is now one of the favourite countries with attractive investment opportunities for foreign investors. The dramatic increase of the interest from the foreign investment happens because of the following reasons:
1. High potential economic growth
The economic growth for Philippines remains to be the fastest among the countries in Southeast Asia. According to the International Monetary Fund (IMF), the gross domestic product (GDP) growth for Philippines was 6.9% in 2016, has increased from 5.9% in 2015. In comparison to other countries such as China’s 6.7%, Vietnam’s 6.2%, Indonesia’s 5.0%, Malaysia’s 4.2%, Thailand’s 3.2%, Singapore’s 2.0% and Taiwan’s 1.4%, the GDP growth for Philippines was the fastest. It is predicted that the GDP growth for Philippines will remain strong at 6.8% in 2017 and 6.9% in 2018 due to high domestic and international demand. The stable economic growth boosts up the confidence of investors to invest in Philippine real estate.
2. Increasing number of foreigners in Philippines
Philippines has become one of the popular countries where foreigners are looking to relocate. According to the survey done by InterNations, Philippines is ranked as the top 10 countries where expats live the happiest lives. Philippines is well-known for the friendliness of the locals and undeniable, the hospitality of the citizens is one of the reasons why foreigners enjoy staying in this beautiful country. Moreover, the cost of living in Philippines is low as it is 52.34% lower than in United States according to Numbeo. No matter it is for working or retirement life, Philippines is definitely a good choice for expats. Therefore, renting is increasingly popular among the expats who are staying in Philippines. Due to the high demand for Philippine properties, the value of the properties is believed to have a great potential to increase in the near future, and so does the expected gross yield.
3. Huge housing backlog
The housing backlog in Philippines is estimated to be at about 5.7 million. This shows that at an average of 5 members in a family, more than 20 million Filipinos do not own a decent home. The increasing demographic in middle-class buyers pushes the Philippine real estate sector in mass housing. According to Michael Mabutol, the CEO and Managing Director of real estate consulting firm, Pinnacle, the next key opportunity in Philippine real estate sector will be the income-generating assets, which has the potential for renewable income. More investment opportunities can be obtained not only from commercial centres and office buildings, but also from residential homes.
4. Urban renewal and redevelopment
The increasing population and economic growth have also led to a continued need of urban renewal and redevelopment, which is better cope with subsequently increasing living. The urban renewal and redevelopment projects are not only executed by the local government, but also by other private developers such as Megaworld and Century Properties. In the future, it is foreseen that there will be a rise on the mixed-use developments in the township, which increases the opportunities for real estate investment for both local and foreign investors.
5. Real estate developers with strong financial base
Nowadays, Philippine real estate developers are so much stronger and well-financed. According to Antton Nordberg, the research and consultancy manager of KMC MAG Group, local real estate developers are willing to spend up to PH ₱ 369 billion in 2016. Due to the high end-user demand, they are eager to invest in building more properties in Philippines.
In conclusion, it is now a right time to invest in Philippine properties based on the reasons above. If you are planning to include Philippine real estate in your investment portfolio, please do not hesitate to contact us for more information.
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