The Philippines is the ideal location for a holiday as well as investment. There is strong demand for property in Philippines especially in the tourism sector market. Research has shown that demand for properties has mostly come from investors buying for one or more of the following reasons:
• Buying a holiday home in a region which has a lot of attractions and facilities.
• Buying for capital appreciation as investors are increasingly aware of the high growth potential offered by the Philippines real estate market.
• Buying a home for retirement in an ideal retirement location as it is sunny, healthy, relaxed and clean.
Investment potential for overseas property buyers in the Philippines is enormous, with the property outlook remaining very healthy as strong demand is expected to build up even further despite the global economic slowdown as the property market is exhibiting a sustained and prolonged growth for the following reasons:
• Strong and sustainable economic growth with the Philippines being one of the fastest growing economies in the region.
• Sustained Foreign Direct Investment.
• Strong population growth of 2.5% a year and average household size of 5.
• An economy that’s projected to expand in spite of the global slowdown.
• Excellent location and accessibility with low cost frequent flights from many major cities in Asia and the world.
• Property prices in the Philippines are still really low compared to neighbouring countries like Singapore.
This will undoubtedly lead to a substantial capital appreciation to fill this price gap.
• Strong capital appreciation with prices appreciating between 15 and 20% a year.
• A demand from an expanding and affluent expatriate population which is relocating to the Philippines for employment or retirement.
• English is widely spoken which encourages both investors and tourists.
• Very strong demand from Filipinos living overseas who aspire to own their own property in their home country. In 2008 there were over 11 million Filipinos living overseas.
• Filipino’s lifestyle values that favours home ownership.
• Western based legal system.
• Land title reforms.
• Low cost of living.
• Rising income.
• Tight property supply not catching up with demand.
• High rental yields with the buy-to-rent market rapidly growing in the Philippines, fuelled by an increasing number of tourists and rising incomes of a growing young, educated professional class.
• Favourable demographics: The Philippines has a large young population which is expected to fuel demand for property as this population grows older.
• Thriving tourism is creating very strong demand in the property market.
• Although hotel accommodation is still popular, there is a considerable increase in demand for self-catering apartments and quality accommodation from independent travelers which is leading to a significant increase in demand for rented holiday property.
• Strong all year round rental demand with warm weather throughout the year.
• Buying for capital appreciation as investors are increasingly aware of the high growth potential offered by the Philippines’s real estate market.
• Channeling of remittances and savings into investments, especially housing.
• Fiscal and banking reforms such as tight lending regulations and low LTV3 requirements which were introduced in the 1997 Asian crisis to avoid serious credit problems like those facing the USA and Europe today, are strongly supporting the Philippines real estate market.
• The property market the Philippines is reaping the benefits of poor economic conditions in various countries across the globe as foreign investors rush to find a safe and secure environment for their money. A slowdown in western economies combined with overvalued property markets and reduced yields have encouraged many westerners in general and Europeans in particular to look for new emerging and undervalued markets. The current economic situation and property market conditions in the Philippines present a unique investment opportunity that offers high yields and excellent capital appreciation potential.
For the real estate investor who seeks to maximise capital growth while minimising risk, this is an opportune moment to invest in the Philippines as there are strong signs that it is becoming even more popular and while property prices are still low.
The stability of the property market in the Philippines is closely linked the stability of its economy which is currently expanding at a sustainable rate with growth predicted at 3.0 to 4.0% in 2009.
The Philippine economy is well positioned to weather the global economic slowdown whose effect on the property market is likely to be subdued because the economy is expected to remain resilient due to significant reforms in fiscal and banking sectors, build-up of reserves, low debt ratios, an increase in government spending, resilient external sector, surplus in the Balance of Payment, large remittances, channeling of remittances into investments especially housing, resilient domestic financial markets, adequately capitalised banking system, low exposure to sub-prime related distressed credit products and increasing saving ratios.
Strong growth in the property market is set to continue in spite of the global slowdown as current circumstances have created an ideal environment for a prolonged and sustainable capital appreciation in the Philippines real estate market because of significant demand and still reasonable real estate prices.
High rental yields with the buy-to-rent market rapidly growing in the Philippines, fuelled by an increasing number of tourists and rising incomes of a growing young, educated professional class.