Philippines offers compelling investment opportunities for Asian property buyers
As the global economy climbs out of the COVID-19-induced slowdown, investors are discovering new gems in the Asian property landscape, which has seen tectonic shifts in the aftermath of the pandemic. Foremost among these is the Philippines, site of a landmark project by two leading property developers in the region: Hongkong Land and Robinsons Land Corporation.
Drawing the attention of serious investors is a compelling combination that the Philippines alone can offer at this time: a fast-growing economy, resilience to external shocks, and a price advantage compared to other Asian locations. These have created a buying opportunity for investors looking for property with a strong upside potential.
A winning combination: cost advantage and higher rental yields
Sheila Lobien, chief executive officer of Lobien Realty Group, believes that “2022 is the best time to invest in Philippine real estate,” pointing out that prices are still low, offering a window of opportunity to investors ahead of an imminent increase in property prices driven by economic growth. “The uncertainty brought about by the pandemic softened property prices but the expected economic recovery is also expected to affect property demand and increase prices,” she said.
A study by Colliers on the residential condominium outlook in H1 2021 noted that Metro Manila enjoys higher rental yields of 3.9% to 5.7% compared to Bangkok (4.4% to 5.2%), Ho Chi Minh (3.7% to 4.8%), Kuala Lumpur (2.3% to 5.4%), and Singapore (3% to 3.3%).
This is collaborated by consultancy firm Santos Knight Frank, which noted a strong demand for residential properties, especially in the condominium rental market in Metro Manila central business districts, as a result of re-opening borders, higher vaccination rates, and return-to-office programs.
Resilient and growing economy
By all indications, the Philippine economy—which has proven to be extremely resilient to external shocks—is primed for growth. Remittances from overseas Filipino workers are growing back to pre-pandemic levels, unemployment is improving, and interest rates remain low. In fact, property loans increased 9.3% in 2021 despite the pandemic, indicating that investors have taken advantage of the low-interest regime to build their portfolios.
Further, the Philippine economy maintained its growth momentum in the first three months of 2022 as it expanded by 8.3%, beating forecasts.
The Philippines also gains considerable advantages from being in a demographic sweet spot, with an average age of 23, translating to a strong domestic market and a competent workforce. Moreover, it has an English-proficient, customer-focused, highly trainable and adaptable talent pool to power its economic growth. Read More...
