The Philippine real estate market is booming, and not just in Metro Manila. Investors are looking into the emerging hotspots of Cebu, Cavite, Davao, Iloilo, Bacolod, and Pampanga.
At the second installment of the Lamudi Outlook roundtable series held this week in Makati, panelists were bullish over the growth in residential, office, industrial and tourist-related property listings and demand outside Metro Manila, amid the country’s projected steady economic climb.
Almost all of the panelists were unanimous that despite the steady increase in property prices in the provinces, they expect purchases and rentals to pick up “because of the intrinsic value of property.”
Meanwhile, Colliers, which co-organized the Outlook series, opined that said real estate developers are looking outside Metro Manila for their projects to complement the government’s own infrastructure projects.
Joey Bondoc, senior research manager of Colliers International Philippines said the real estate sector is ostensibly taking advantage of the Duterte administration’s “Build, Build, Build” program, which developers and construction players expect will sustain the country’s growth “over the next two to three years.”
Surge in demand and supply
Roundtable moderator Bhavna Suresh, CEO of Lamudi, opened the discussion by citing the growing interest from local and foreign investors, as bolstered by the national government’s robust infrastructure projects in provincial cities, which has attracted a surge in interest among property buyers from here and abroad.
She said that from 2017 to 2018, Pampanga registered an 873-percent increase in leads on the Lamudi platform. During the same time frame, Cavite witnessed a 298-percent increase in leads, Davao raked in 69 percent, while Cebu and Iloilo also increased by 274 and 214 percent, respectively. Page views among properties in Bacolod likewise spiked by 38 percent, she added.
Based on Lamudi listings from 2017 to 2018, Davao enjoyed a 102-percent increase in listings while Pampanga saw a 202-percent spike. Likewise, Cavite’s listings spiked by 188 percent. Cebu-based listings increased by 27 percent while Iloilo grew by 29 percent.
Bacolod, however, had more property searches than the available supply during the time period, where apartment and land searches were seven (7) percent and 12 percent higher than the supply, respectively.
Decongesting Metro Manila
Cavite was discussed as a fast growing business hub. Pampanga is also grooming itself as a primary investment site, given in large part to the lack of developable land in Metro Manila.
Other reasons seen to bolster growth in the provinces are lower inflation and lower income taxes, which could help boost the retail sector.
Outsourcing firms, which are seen to sustain demand for office spaces, will continue to seek the Philippine Economic Zone Authority’s proclaimed offices outside Metro Manila.
The expansion of offshore gaming firms are seen to continue as a number of local governments are taking a more concrete stance on these businesses, which should offer clarification as to the expansion plans of these firms in the next five years.
As for residential spaces, developers are expected to be more aggressive in launching new projects in the fringes of central business districts, where land is cheaper.
Tourism is an attractive option for investors, with the hotel sector expected to flourish despite the government missing its target last year of 7.4 million tourists.
Bondoc projected about a 10% rise in foreign arrivals in 2019, or 7.8 million tourists. This should sustain hotel occupancy at around 69% over the next 12 months, at least, he said.
House and lots dominate
The panelists acknowledged that most property seekers in the provinces are interested in house and lots, although there’s also a growing interest for residential condo units.
The majority also prefer to buy these types of properties compared to those who want to rent them. In Iloilo, for instance, the page views for houses were close to 62 percent among property seekers, about 52 percent when it comes to sessions, and 59 percent for leads generated, based on Lamudi’s data.
The same is true for Cavite, where about 64 percent of the leads came from house searches.
