Dubai: The Philippines real estate market is not only attracting investments from Filipino expatriates but also from foreigners who are either buying retirement homes or expanding assets in the country.
The relatively cheap properties and the opportunity to make significant returns are a major draw for foreign buyers. Philippine laws allow foreign nationals to own condominiums or residential units in high-rise buildings.
The property market in the country has been growing in recent years, largely due to high demand from Filipinos working abroad. Some 2,800 new residential units are coming onto the market this year, while rents and prices are forecast to grow by 9.5 per cent and 6.2 per cent respectively, according to Colliers International.
Jonas de Villa, managing director of Dorotea Commercial Broker, which has an office in Dubai, said foreign buyers comprise about 10 per cent of their clients and are drawn to beachfront units and properties near the coastline.
“Many of these buyers are looking for units they can retire to. They are either married to Filipinos or purely expatriates, such as Indians and British nationals,” de Villa told Gulf News.
Industry sources said foreigners are keen on investing in the Philippines because, among others, real estate prices in the country are relatively lower than in other markets in Asia and the United States.
Property investments also prove profitable, considering there is a high demand for residential units from foreigners working in the business process outsourcing and information technology outsourcing industries in the Philippines.
Frank Cimafranca, Philippine consul general in Dubai, also urged Filipinos working in Dubai to consider investing their income in real estate. He said property is a good option for those looking to grow their money or secure their future, considering that the returns are high.
“It’s a better alternative to keeping money in the bank. The interest rates now are very low and you’d be lucky if you get 2 per cent in the bank. Whereas, in real estate, if you go for a very good development, you can be assured of a better return,” Cimafranca told Gulf News.
Cimafranca recently visited the Pinoy Property Show in Dubai where developers showcased properties in major cities in the Philippines.
Demand among renters
“Many of the properties can be self-liquidating as they are well-located, hence they will be in demand by potential renters. The rent and prices are increasing every year. In fact, I was told by one developer that the properties they were pre-selling for 1.3 million pesos [Dh116,000] a couple of years ago are now worth 5 million pesos [Dh449,000],” Cimafranca said.
“These properties are in very good locations. They are near the airport, hotels, entertainment centres and casinos,” he added.
Cimafranca brushed aside speculation that the market is heading for a bubble, citing that developers in the country are very cautious. “Our developers have learnt lessons from other markets. Even with the furious pace of development in the housing sector, I believe these developers will keep a very sustainable pace. Even our banks are also cautious in granting credit. This has contributed to the stability of the industry,” Cimafranca added.
Colliers International has predicted that the residential market in the Philippines will continue to look strong this year “due to the anticipated economic growth in 2013 and the sustained occupational demand from expatriates.”