Survey shows 60% cite cost constraints in delaying purchase
Can’t afford to buy a home? According to a recent survey by online global property portal Lamudi, you are not alone.
Sixty percent of the respondents to the survey in Lamudi’s report “Real Estate in the Emerging Markets” prefer to rent rather than buy a residential unit due to cost constraints, while the remaining 40 percent sought to buy a home for the security of ownership.
Lamudi Managing Director Jacqueline van den Ende said the report found that the majority of the property hunters online are “relatively young,” with limited sources of income.
“Some 60 percent of the property queries are for rent, while the 40 percent are asking to buy properties,” van den Ende said.
“Most of these respondents are relatively young, saving first and trying the property before buying. They are saving up, until they find a property and at some stage, they will buy eventually, given the young population,” she added.
She also noted that about 90 percent of the world’s young population lives in emerging markets.
“The Philippines is an attractive spot in the real estate market because of the favorable macroeconomic levels, affordability, and the debt markets are opening up, which is a positive indication for the foreign investors,” van den Ende said.
“In terms of the Philippine economy, we see that 70 percent of the economic growth in the next few years is attributable to the growth of the country’s real estate,” she said, citing the relatively young population and expectations of higher foreign direct investments, overseas Filipino workers remittances, strong macroeconomic numbers, improving safety in communities, and increasing government transparency as positive indicators.
Sector faces some risks
The Lamudi chief said that despite the positive outlook for the sector, it also presented some challenges—a relative oversupply in the high-end segment and a serious backlog in the affordable housing sector.
Land scarcity in the metro is also a rising concern. Van den Ende said that the top property developers in the country are competing to develop big scale projects in Metro Manila, which causes higher prices for increasingly scarce land.
In addition, many foreign investors are beginning to worry about the elections and change of administration in 2016, as it will likely change the gameplay in the Philippine economy, she added.
The Lamudi report covered 16 emerging market countries including the
Philippines, Indonesia, Myanmar, Bangladesh, Pakistan, Sri Lanka, Jordan, Saudi Arabia, Nigeria, Kenya, Tanzania, Morocco, Ghana, Ivory Coast, Mexico and Colombia.
Lamudi is a real estate portal of the Rocket Internet Group, whose businesses include exporting Internet solutions from the US to emerging markets.
Kristyn Nika M. Lazo