INFRASTRUCTURE and urban planning are the key concerns that the Duterte administration should address in order to sustain the growth of the real estate industry, analysts said.
In a recent interview, KMC Mag Group head of research Antton Nordberg said the sustainability of the real estate industry is an issue that the new administration should include in its agenda.
According to Nordberg, one way of addressing sustainability concerns is through urban planning in the country, specifically in Metro Manila.
“Sustainable growth of the real estate industry – essentially, that would mean a centralized urban planning, or [giving]more power to the Metro Manila development authority,” Norberg said.
Implementing a centralized urban planning measure would mean having one authority that manages how buildings and structures are planned in the urban areas.
“Metro Manila — now it needs a clear plan and it needs one authority to manage this plan,” Norberg said.
He said this sole authority would be in charge of implementing which areas of the city will be earmarked for commercial development, which areas can be used by developers to build residential buildings, and so on.
“It’s easier to manage if you have this centralized urban planning,” he explained.
Another key concern that the new government must address is increased infrastructure spending, the analyst said.
“Increase infrastructure spending. It will also increase competition and it will also result in having better, higher quality buildings,” Nordberg said.
Claro Cordero Jr., head of research, consulting and valuation advisory at Jones Lang Lasalle Philippines, echoed Nordberg’s sentiments. Cordero said there is a need to develop public infrastructure especially in the emerging business districts.
“Clearly there is a need to develop more public infrastructure support, as new emerging business districts to be completed will make available more than 2.7 million sqm [square meters]of office space, 120,000 residential condominium units, and 1.7 million sqm of shopping mall space over the next four years,” Cordero said.
On the regulatory reforms side, Cordero said the issue on foreign ownership limits should also be reviewed by the new administration.
“Limitations on land ownership by foreign nationals are seen as an impediment to the flow of foreign direct investments into the real estate sector,” Cordero said.
Nordberg noted that the country needs more foreign investments in order to produce better quality products and increase competition in the market.
“The real economy cannot produce resources that are needed for production facilities,” Nordberg said, referring to part of the economy that is concerned with actually producing goods and services, as opposed to the part of the economy that is concerned with buying and selling on the financial markets.