THE property market is expected to further heat up in the next few years, driven by the Duterte administration’s ambitious rollout of infrastructure programs and the robust growth of the business process outsourcing (BPO) industry in the Philippines.
“There will be greater demand within the real estate market because, imagine the worsening traffic [that will be brought about by ongoing infrastructure projects]. People would just want to rent a condominium or an apartment that is near [work], than travel,” Jones Lang LaSalle head of project leasing and regional director Sheila Lobien told The Manila Times.
The ‘Build, Build, Build’ program is part of the 10-point Socioeconomic Agenda of President Rodrigo Duterte, which is aimed at reducing poverty from 21.6 percent of the population to 15 percent by 2022.
Among the reforms in the agenda are the acceleration of infrastructure programs, with public infrastructure spending targeted to reach P8 trillion; and the development of industries that will yield robust growth, create jobs and uplift the lives of Filipinos.
“Also, a main driver of the demand is really the outsourcing industry, and we can see … there is the avenue of office demand coming from Chinese investors, but I think it’s also linked to the outsourcing industry—so that will really fuel the economy,” she added.
In a presentation made by Lobien during the Asia Real Estate Summit last week, office supply for the first quarter of 2017 surged by 54.5 percent to 1.3 million square meters (sqm) as compared with the 845,100 sqm during the same period last year.
Total retail supply increased by two percent to 17.3 sqm from the 16.9 sqm reported in 2016, with an additional 1.1 million sqm of future retail development.
Hotel supply increased by 1,900 rooms, totalling 27,600 rooms versus the 25,700 rooms in the same comparable period.
For the residential market, approximately 260,600 units were completed in Metro Manila in the same period, with 127,900 units expected by 2022.
“The continued positive performance of the offshoring and outsourcing industry will continue to support the growing demand for residential condominium developments, and the rising population of young professionals will likely be a source of future demand for residential projects,” she said.
Similarly, the level of remittances from overseas Filipino workers (OFWs) continues to increase “and this has positive effect in home buying,” she said.
“The office market, as always is the best indicator of a growing economy because once the offices are built and are taken, it means jobs are created and companies are expanding, and we have a growing population, growing middle class, that’s why we see that the residential—condo, housing market—will also grow,” Lobien said.
“Because more people, more real estate requirement. Our average age is 24 years old, and we have 68 million in the working population ... so imagine, all of those will need real estate at one point in their lives,” she added.