It is no secret that the real estate market here in the Philippines is on the up: the economy continues to grow, property prices are rising and foreign investors are flooding in.
Yet in recent months, there has been growing pessimism about the country’s economic prospects and, with it, the future of the real estate sector. Some have even speculated that the stellar growth of the Philippine property market is not so much a miracle story of economic recovery, as a bubble that is about to burst.
However, as both the economy and the real estate industry continue their upward march, there are plenty of reasons to ignore the critics. Here are five of them.
1. The economy has never been stronger.
Even the devastating effects of Typhoon Yolanda last November did not significantly halt economic growth. The Philippine economy has proven to be remarkably resilient, recording an incredible 7.2% spike in GDP in 2013 – a trend the International Monetary Fund has predicted will continue in the coming years. The country’s astounding economic performance recently prompted TIME magazine to name the Philippines as one of its top emerging markets to watch.
2. Younger demographics mean growth is likely to continue.
A recent study from CLSA Asia-Pacific described the Philippines as sitting on a “demographic sweet spot”. Young urban professionals will account for half of the country’s discretionary spending and about half of overall economic output by 2020, according to the report. Their economic impact will only increase in the coming years, as they start to make significant long-term investments – including in the property.
3. International investors are flocking to the country.
In foreign investment, the Philippines have significantly benefited from law changes in neighboring countries. This year, both Hong Kong and Singapore – considered two of Asia’s real estate investment hotspots – started imposing higher property taxes, in an attempt to stamp out speculative foreign investment. This has made the Philippines more attractive to foreign investors hoping to snap up residential properties. Plus, they can get some of the highest returns on investment in Asia.
4. Thanks to the internet, buying a property has never been so easy.
As more and more people switch online, Filipinos are starting to expect more of the web. They want to have access to the same eCommerce platforms that are available in more developed markets. They want to be able to use the internet to buy clothes, shop for electronics and even rent a house, which is where services like Lamudi come in. Buying property online can be faster, easier and even more secure than traditional methods. Demand for our services is only going to gather speed as the rate of internet usage increases: currently about a third of the country uses the web, but that figure is rising fast.
5. It is still a buyer’s market.
Interest rates are at a record low, as is the amount needed for a down payment on a home. At the same time, property prices continue to increase every quarter. All of these factors have prompted many Filipinos to become homeowners for the very first time. Increasing demand has fueled a construction boom: over the next three years 25,000 residential condominiums will be built in central Manila, nearly half the number built over the previous 40 years. Our verdict: strike while the iron is hot.
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