Whereas much of the world is in shock with the current real estate situation in many countries, theÂ real estate marketÂ in the Philippines is quietly chugging along. Recent reports in popular Philippine newspapers have somehow asserted us to the fact that their property boom is still active and live.
We only need to look at the latest endorsement of a combined 10 projects with a worth of US$125m by the Filipino Tourism Department to see that their economy is still alive and kicking.
Building and refurbishment boom in Makati City
Most of these developments or expansions have been approved in the City of Makati, smack bang in the middle of Dowtown Manila. Included in those is the US$66 million expansion and modernization of the Makati Medical Center, the US$9 million refurbishment of the Peninsula Hotel in Makati City and the US$25.5 million expansion of the -Medical City hospital in Pasig City.
Growing tourism in recent years has been a major factor boosting Philippine’s property boom along, since where there are people with money to spend, there is now a need for accommodation and investments.
With many new markets entering the field, this is only expected to further tourism growth in the future still. New wealth from Russia, China and Korea as well as the Middle East have made it possible to allow these nationals more indulgences and luxuries.
Last year was a boomer year in regards to tourism numbers. Over three million tourists visited the Philippines and many of them have money to spend. This year sees projected arrivals of around 3.4 million. The total expected revenue to be generated from this influx of tourism is expected to be around US$ 5.8 billion.
Other new developments include the US$ 153 million Kingdom Hotel. It is a combined hotel and residential condominium that will rise in Makati City.
Besides Makati City other promising and busting regions for real estate are Fort Bonifacio and the Bay Area. Cebu and Boracay have always been top tourist destinations in the Philippines and continue to grow.
Residential boom due to offshoring and outsourcing
Meanwhile, the offshoring and outsourcing boom is still continuing to create opportunities in the residential and office markets.
In Makati alone, there are over 18,140 residential condominium units planned for building between now and 2013. In close by Fort Bonifacio, there are going to be 33 new residential condominium units to be built between 2008 and 2012. This translates to an additional 11,652 units.
A total of 731,871 square meters of property in Metro Manila has been earmarked for new offshoring and outsourcing facilities this year, according to CBRE research. 189,614 square meters of this is already pre-committed before construction even commences.
Overseas Filipinos are making the most of the current situation
Filipinos based in Ireland have their eyes set on investing in their home country. Some say a property in Ireland is equal to six in the Philippines while the value of the quality of the properties is three to four times better in their home country than in Ireland.
To further this boom, many use their strong Euro to invest while the going is good. However, despite all the rosiness of the Philippine property market there might still be troubles brewing on the horizon.
Rising costs and inflation worries
With constructions prices on the hike and the ever increasing fuel costs, Filipinos will certainly have to look out for their finances too. While those based in Europe can take advantage of the (still) strong Euro, they might also soon see the value decreasing since the central bank is poised to increase interest rates due to inflationary worries.
Some property companies have already increased their prices from five to twenty percent.