WITH the first month of the year coming to a close, the last of the crystal balls into the state of real estate in 2018 may have just been divined.
The consensus is that the sector is in for another good year.
What are some of the factors fueling the industry’s growth in 2018?
The Philippine economy has just been reported to be the third fastest growing in Asia, behind China and Vietnam. Having registered a growth rate of 6.7 percent in 2017, the country is now setting its sights on an accelerated performance of 7-8 percent this year.
The economic growth story is mirrored in the property sector.
The Manila Times last November reported on a BMI Research analysis that “the Philippines’ residential and non-residential building sector will remain robust over the coming years, supported by public and private investment in real estate, commercial development and industrial facilities.”
The following month, another story cited real estate service provider Knight Frank Santos, saying “more office space needs to be created in the coming years as there will be more jobs produced especially in the business process outsourcing sector.”
In its November 2017 market overview, JLL pointed to the business process outsourcing (BPO) and gaming sectors as behind 38 percent of the demand for office space.
The Golden Age of Infrastructure
The government’s mantra can’t be clearer: It aims to Build, Build, Build.
And when it does, areas where bridges, roads, rail lines, airports and seaports_even new cities_will be built are expected to usher in economic activity and investments, including those related to property development.
Already, industry observers have noted that the government’s infrastructure push will impact significantly on real estate developments in the years to come.
Moving beyond Metro Manila
Developers have already signaled a push for projects beyond Metro Manila, with some opting for the township route that brings together residential, retail and office projects in a master plan.
The push is partly driven by the spread of more BPO and economic zone operations across the country. Increased earnings that these industries bring to local workers result in demand for housing and retail spaces.
New townships_and their requirements for vast tracts of land_have already re-imagined a number of our country’s key cities. Some, like Bacolod and Iloilo, have “expanded” beyond the city centers of old.
With the Philippine economy expected to continue its upward trajectory, and the government investing in infrastructure, the future does look hopeful for the property sector in 2018.