“Ryan Isip, national director at real estate services firm JLL Philippines, believed that as long as the country’s population is growing, the demand in the real estate sector will continue to be strong across different segments— office, retail, tourism, and residential.”
by Madelaine B. Miraflor
July 26, 2016
Despite issues of oversupply, the country’s real estate sector will remain strong, with the pace of its growth even expected to ride with the stable Philippine economy that President Rodrigo Duterte intends to further strengthen.
Ryan Isip, national director at real estate services firm JLL Philippines, believed that as long as the country’s population is growing, the demand in the real estate sector will continue to be strong across different segments— office, retail, tourism, and residential.
He also said the appointment of Duterte is helping improve the sentiment of investors, both local and multinationals, toward the local property market.
Just the fact that Duterte said he intends to work hard to achieve peace and order is already making multinationals comfortable investing here, Isip said in an interview with reporters on Tuesday.
“There are actually a lot of room to grow for the Philippine market. If you look at it, there are a lot of industries that is pushing the growth of the economy. Philippines is the second fastest growing economy in the ASEAN region and that is expected to continue,” Isip further said.
More people, more real estate. As the population grows, the demand for housing, office and factory will rise as well,” he added.
Isip also said that the real estate yields in the Philippines is much higher than the all-in borrowing costs, compared to other countries like Beijing, Tokyo, Singapore, and Shanghai, which could even have negative yield.
Lizanne Tan, JLL Philippines regional director, said that almost all segments of the property sector will continue to be strong, especially office, despite issues of oversupply in the market.
Residential, tourism, and retail will likewise continue to pick up, according to JLL Philippines country head Lindsay Orr.
Orr even said that Duterte’s plan to open the gates of private villages to ease traffic woes and direct new investments in the provinces will also boost the real estate sector one way or another.
In his first State of the Nation Address (SONA), Duterte said on Monday that he will ask emergency powers from the Congress to solve the traffic woes in the country.
This would allow the national government to override local government ordinances to manage main roads and compel private villages to open their gates to public access.
Orr said that while there will definitely be a resistance on the part of the residences living in private subdivisions, it will be one way of easing the traffic situation but how it will affect the pricing of the properties inside them will still be difficult to predict.
Some of Metro Manila’s private subdivisions and gated villages are Forbes Park, Dasmariñas Village, and Urdaneta Village. Bel-Air Village is also a gated community but it allows cars to pass through it in the morning.
Meanwhile, Claro Cordero, JLL Philippines head of research, said the President’s plan to direct the investments in the provinces will also be a good idea.
He said it will decongest Metro Manila at the same time will generate more jobs and demands outside of it.