Q&A: What’s in Store for Philippine Real Estate in the Next Five Years?
Q: What’s in Store for Philippine Real Estate in the Next Five Years?
A: The last couple of years have been banner years for Philippine real estate. The country has become one of Asia’s bright spots and a favorite destination for international property buyers. Despite this exuberance, more opportunities are expected over the next few years.
1. E-commerce Boom to Change the Real Estate Landscape
Although Internet penetration in the Philippines is still low, it is growing massively, so we can expect more Filipinos to become Internet users in the coming years. This presents a huge opportunity for e-commerce sites, including real estate platforms, as the Internet will become the very first place where buyers will start their home search.
2. ASEAN Integration
In 2015 the 11 nations of Southeast Asia will form a single market where goods, capital, and skilled labor can move freely across borders. Many experts believe that this will benefit the local real estate market. For instance, foreign businesses are expected to expand their operations in the country; therefore, we can expect a higher demand for office, industrial, and residential space. In addition, in order to keep up with our neighbors and remain competitive, more and better infrastructure will be needed to fuel and maintain growth. Local businesses will race to build the needed infrastructure, offices, retail complexes, and residential developments that our booming economy needs.
3. BPO Industry to Maintain Demand for Offices
With the business process outsourcing sector (BPO) expected to employ more than 1 million Filipinos in 2015, more and more office space will be needed to accommodate this important industry. Indeed, Metro Manila’s sector is already described as tight, with a vacancy rate for the first three months of 2014 of just 2.58 percent. Offices are becoming so hot that many are getting snapped up even before towers are completed, according to global real estate consulting firm Cushman & Wakefield.
4. New Economic Hotspots
With Metro Manila becoming very expensive and overly populated, new growth areas are staring to emerge. Among these possible growth areas are Iloilo, Cagayan de Oro, Bacolod, Angeles and San Fernando in Pampanga, Santa Rosa, and General Santos City, which already are growing rapidly. Many of these cities are now hosting BPO companies, industrial parks, and mixed-use townships.