An acute shortage of skilled construction workers threatens the growth of the property sector in 2020, according to consulting firm Colliers International Philippines.
CIP said in a report that while the domestic property sector was expected to remain robust next year, it would face several headwinds that could constrict growth.
It said one of the challenges that could temper the growth of the real estate sector was the acute shortage of skilled construction workers. Several construction companies and real estate developers earlier complained about the difficulty of hiring skilled workers despite the offer for higher salaries.
This problem would likely delay the launching and completion of residential projects in Metro Manila, CIP said.
CIP said another lingering concern is the next phase of the Comprehensive Tax Reform Program that would be approved by Congress.
“The delays in the approval of the measure that proposes to reduce corporate income tax rates and rationalize tax incentives granted to foreign investors has been compelling occupants to take a wait-and-see stance,” Colliers Philippines said.
The consulting firm also pointed to the government’s inability to fully spend its infrastructure budget which would likely result in delayed construction of vital public projects that provide direction to property developers’ expansion strategies.
“Colliers believes that over the next 12 months, developers should continue to adapt to the evolving preferences of investors and tenants to survive in a fiercely competitive Philippine property market,” CIP said.
It advised property developers to actively discuss with the government and other stakeholders the policies and programs that would likely further redefine the Philippine property landscape.
Property firms were also encouraged to continuously look for opportunities to capture demand from foreign retailers in light of the lower capital requirements for foreign retailers and capitalize on opportunities for transit-oriented development in urban areas outside Metro Manila, following the infrastructure development of the national government.
Colliers Philippines said that in 2019, property firms focused on developing more co-living projects amid worsening traffic in Metro Manila.
Developers also ramped up launches of mid-income condominium projects in the fringes of major business districts and were aggressive in acquiring properties outside Metro Manila for land banking activities.
“Overall, we see the Philippine economy’s upward growth trajectory being sustained by massive public infrastructure spending. This government spending-backed economic growth should further stoke the property sector,” it said.
