One of the country’s most exciting industries continues to exceed expectations, but there are burning issues that can disrupt its growth
Given the upward trend witnessed in the Philippines’ real estate sector in the past 12 months, industry experts are optimistic that the growth will be sustained this year, but there are major areas for growth that need to be addressed to maximize the sector’s potential.
The capital, Manila, has seen major investment from global capitalists, according to auditing and advisory firm BDO’s “Asian Real Estate” report, placing the city in the same league neighboring hub Bangkok. There are certain aspects, however, where Philippine cities can surpass its neighbors.
1. Change Is Necessary
With the ASEAN Economic Community now in effect, the Philippines is seen by many analysts to be in a good position to lead in the region’s property growth because of its young population and English-language proficiency. But success can be achieved by implementing certain changes, beginning with infrastructure.
National Economic and Development Authority (NEDA) chief Arsenio Balicasan recently told reporters in Manila: “There is a constant need for the infrastructure system to keep up with rising demands in the fast-growing economy, especially these days as new property investments flood the market.”
Balicasan emphasized that the country’s weak infrastructure squanders the full potential of Philippine real estate and continues to hound the industry. He added that more transparency in the market and possible ownership policy changes could help increase investments in the country.
2. The Future Is Green Building
Meanwhile, Ramon F. D. Rufino, executive vice-president of The Net Group and chairman of the Philippine Green Building Council (PhilGBC), notes that the Philippines is still far behind many countries when it comes to environmental initiatives. “But the good news is there is growing momentum,” he claims.
“The awareness and desire for sustainability is already strong, but we really need to improve on the level of commitment and action,” adds Rufino, who highlighted the PhilGBC’s achievements in creating awareness for green building and sustainability, and the establishment of the BERDE rating system when he received the Real Estate Personality of the Year award at the Philippines Property Awards 2015.
“There are so many areas to work on but our top priority is for more and more companies and projects to secure green building certification. It’s easy to market and advertise real estate projects as ‘green’ but only certification provides the users, the public, and the government with the assurance that a project is truly green and sustainable.”
3. Technology Can Transform the Industry
Cyndy Tan Jarabata, president of TAJARA Leisure & Hospitality Group Inc. and three-time chairperson of the Philippines Property Awards, agrees, noting that many big developers have joined the green movement in the last few years. “They look at innovation and they look at design very carefully.”
She adds that some developers are also looking to incorporate smart or green technologies in their projects. “It’s bound to happen not only because it’s what the consumer wants, but because it’s the right path to progress. We have to continue to be mindful of occupier’s or market demands in living, working and space planning.”
Moreover, around 40 percent of Filipinos now have access to the Internet through their smartphone, based on industry estimates. It has allowed the rise of property portals, which reveal that investors are also looking beyond congested Metro Manila for property investment.
4. There Are Real Estate Opportunities Outside Metro Manila
The Thomson Reuters Foundation reported that real estate loans in the country hit a record high of Php1.23 trillion ($25.69 billion) in Q3 2015, per data from the Bangko Sentral ng Pilipinas. It reflects a growing confidence in the property sector as a whole, as well as the tremendous support given by the banking and lending industries in the Philippines.
Secondary cities such as Iloilo and Cebu have become more popular BPO hubs, with the latter being named the country’s second-largest (and eighth biggest worldwide) outsourcing center, per Michael McCullough, managing director of KMC MAG, an international affiliate of Savills.
Putting these secondary cities on the global investment map is the next step for developers, who are increasingly using social media to reach and educate first-time and even experienced buyers or renters.
5. Low-cost Housing Segment Helps Drive the Sector
Although there are many exciting investment opportunities in the Philippines, there are concerns regarding affordability of residential properties. To date, industry experts estimate that the country lacks some 5 million housing units, and that number can only grow as prices soar in the coming years.
The Chamber of Real Estate and Builders’ Associations Inc. (CREBA) is advocating through its five-point housing agenda, “A Home for Every Filipino.” The organization is also pushing for the establishment of a “Department of Housing and Urban Development” in the country as a necessary reform to address the housing situation in a time when a real estate bubble is always a probability.
6. Everyone Can Learn from One Another
A meaningful and informative discussion with the country’s industry and market leaders together with similar-minded professionals can find solutions to address these burning issues. While the future is sunny for the Philippine real estate sector, an open discussion featuring experts and peers can become an effective way to discover new ideas to improve the industry and promote change.
In line with this, PropertyGuru will be holding the Property Report Congress Philippines 2016, a high-level conference to discuss the past, present and future of the country’s real estate industry.
The summit will feature the country’s top industry experts, including opening keynote speaker Lindsay J. Orr, chief operating officer of JLL Philippines, who will give the “State of the Market” address; John W. Mims, chief connector and managing partner of The Hunting Ridge Group, who will lead a workshop called “Driving revenue through social media engagement: Strategies that work”; Dr. Francisco G. Dakila Jr., managing director, Monetary Policy Sub-Sector of the Bangko Sentral ng Pilipinas; and Alexandra Yao, head of branded residential development, Starwood Hotels & Resorts.
The whole-day conference, which will be held between 9:00 am and 3:00 pm at the Fairmont Makati, will also feature expert panel discussions moderated by McCullough (“The Road Ahead: How Manila Should Address Its Infrastructure Problems”), Rufino (“Going, Going, Gone Green in the Philippines”), Jarabata (“Branding the Philippines: The Rise of Branded Real Estate”), ANC anchor David Celdran (“We Need to Talk about the Bubble, or Do We?”), and Property Report magazine’s editor-in-chief and brand director Liam Aran Barnes (“Looking beyond Metro Manila: The Philippines’ Emerging Markets”).
Open to all real estate professionals and anyone who supports the growth of the Philippines’ property sector, the Property Report Congress 2016 includes sponsor’s exhibits, industry overview and outlook, international networking session and lunch, intensive 30-minute workshop, and expert-level discussions.
It will be immediately followed by the black-tie gala dinner of the Philippines Property Awards 2016, presented by title sponsor Hansgrohe and official media partner Property Report.
Tickets and special discounted offers are available now:
Property Report Congress Philippines 2016
$400 per person
Philippines Property Awards 2016 Gala Dinner
$180 per person
$1,700 for a table for 10
Property Report Congress + Philippines Property Awards bundle package
$520 per person
$5,130 for a table for 10
For further enquiries and partnership opportunities, visit the official websites: asiapropertyawards.com/Congress/ and asiapropertyawards.com/philippines-property-awards/
This article was sponsored by the Property Report Congress 2016
Main image via Shutterstock