THE outlook for the Philippine real estate market in 2016 appears bright, as the office sector’s strong performance continues to drive growth, according to a real estate analyst.
In an interview with reporters last week, KMC Mag Group managing director Michael McCullough shared his optimism for the Philippine property sector in the coming year.
“The 2016 outlook for the property market is looking very bright,” McCullough said. “We see a record amount of office take up.”
KMC Mag Group is the Philippine associate of global real estate services firm Savills.
McCullough said he sees a lot more multinational and Business Process Outsourcing (BPO) companies coming in and expanding their operations in the country.
He said this would create more jobs and eventually create more demand for the residential market.
“We see more multinationals and BPOs coming in and expanding, so that would create more jobs, which will flow into the residential real estate market as well,” said McCullough.
He emphasized that the office property market would still be the fastest growing market segment next year.
“Office will be the fastest market segment,” McCullough pointed out. “That’s where the demand is. That’s where investors have been putting their money in.”
He noted that a lot of major developers are still coming with new office developments in 2016.
“Ayala is coming up with a couple of new projects in BGC (Bonifacio Global City); Megaworld is building McKinley West. In terms of growth rate, I still believe that the growth rate of office will be the highest,” he said.
McCullough forecast the Philippine property market to grow by five to 10 percent next year, driven still by Overseas Filipino Workers’ remittances and the BPO industry.
He noted that the Philippines is one of the strongest performing countries in the region, just slightly below China and Vietnam in terms of Gross Domestic Product growth.
“Singapore is down; I think, Hong Kong is down. A lot of the foreign currencies have changed a lot. The Indonesian Rupiah has dropped. The Malaysian dollar has dropped. Even the Singaporean dollar has dropped against the US dollar,” explained McCullough.
These factors have created some flux in the Asian property market, he said, and that the Philippines has been in a very good position to gain from it.
“It makes it better for the BPOs, and it’s better for the OFWs remitting money,” he concluded.