The Philippines is a prime destination for the real estate market. Local and foreign investors are looking towards the country amongst its neighbors in Southeast Asia because of its wide range of opportunities.
In a nutshell, the current outlook of real estate in the Philippines has been mostly positive. The growing BPO and IT-BPM industries, OFW remittances, and the rising urban population have ensured a continuous demand for commercial, residential, and mixed-use developments. Key business districts both within and beyond Metro Manila see a rise in development projects due to their roles as commerce centers. On the other hand, the country’s status as a top tourist destination makes beachfront developments highly attractive to investors.
Current housing costs in the Philippines have also remained competitive within the region, sitting at $3952 per square meter. This average, computed price based on web listings from prime cities in the country (administrative capital, financial capital, and center of the rental market), remains on the lower end of the spectrum. Meanwhile, the Philippines’ house price growth hit its all-time high in 2019 at 10.4%.
Rental prices are at reasonable rates in the country, with condos providing investors with the highest yields. According to the Global Property Guide, the Philippines comes in second-highest rental yield at 6.13%. Even as the price per square meter is lower, rental yields in the country are some of the highest in Asia.
The entry of the Philippine Offshore Gaming Operators (POGOs) into the country has prompted the most recent real estate boom. This trend is due to the POGO license requirement of a minimum 10,000 sq. m. of office space for employees. As of 2019, over 143,00 alien employment permits (AEPs) were issued to POGO workers, with 20,000 more in the first two months of 2020. The increase in these online gaming casinos has driven the demand not only for commercial properties but also residential ones, as POGOs typically provide housing for their workers.
With Manila rated as one of the fastest-growing Asia-Pacific cities in the 2018-2022 forecast, some strategic locations for real estate development include Makati, BGC, Ortigas, and Quezon City. These cities were selected for their proximity to business and recreation, access to transportation, and high urbanization.
Locations just outside Manila have potential as emerging business hubs or proximity to industry centers while retaining their charm as weekend recreational destinations. These locations include Alabang, Tagaytay, Batangas, Santa Rosa, Pampanga, and Bulacan.
Beyond Metro Manila, other cities have established themselves as vital economic contributors. Some of these locations have greatly benefited from the BPO boom, like Cebu, Bacolod, Iloilo, and Baguio. In the case of Davao and Tarlac, recent developments have been geared towards urbanization and the establishment of industrial and commercial hubs.
Finally, the country’s countless islands and pristine beaches have attracted world renown. Beachside homes, condo living, or commercial properties provide attractive investment opportunities. Prime locations for these ventures include Boracay, Palawan, Cebu, Bohol, La Union, Siargao, and Baler.
With its fast-growing economy and rapid urbanization, the Philippines has set itself apart from its peers in the region. As the demand for real estate continues to grow, there is sure to be a wide variety of investment opportunities across the country.
Collaboration with RE/MAX Philippines. Images from Pixabay.