Introduction to Real Estate in the Philippines
Entering 2024, real estate development in the Philippines has emerged with promising opportunities and exciting market trends. As with the years prior to the pandemic, the housing market has been a key driver for the continuous growth of the country’s economy, accounting for a gross value of Php 536 billion in 2022. And its momentum is likely to continue, with more Filipinos expressing interest in acquiring real estate properties, the growing middle-class segment’s purchasing power, and the sustained remittances from Filipinos working overseas.
In Metro Manila alone, the growth of residential properties has seen significant growth, outshining its counterparts not just in Southeast Asia, but also beyond. Surpassing highly urbanized centers in destinations such as Shanghai and Dubai, Manila has posted a remarkable double-digit growth at 21.2% year-on-year value gain.
Filipino Resilience
Despite the challenges of the pandemic, global inflation, and supply chain disruptions, the Philippines has shown resiliency and proved to be one of the fastest growing economies in 2023.
The ongoing infrastructure projects in Metro Manila also contribute to the encouraging outlook concerning real estate development. Projects such as the Unified Central Terminal in Quezon City designed to connect the LRT – 1 and MRT – 3 systems will improve transportation in the capital, and will likely influence more investments in the housing market.
Interconnectivity
Improved transportation systems will likely shape the residential landscape, not just in Metro Manila, but across the Philippines. As infrastructure projects move forward, developers will also expand their property development plans in rural areas.
A shift in preference is already being observed, as prospective buyers continue to express growing interest in buying properties outside Metro Manila, particularly in areas such as Batangas, Cebu, Bohol, Davao, and Palawan.
OFWs and Affordable Housing
In the post-COVID era, affordable housing sits atop the investment strategies of Overseas Filipino Workers as evidenced by growth of market interest from 8.1% to 11.7% in Quarter 2 of 2023. Since the return of these expats, premium units in Metro Manila and major provinces have been acquired left and right from the country’s leading developers, ranging from Php 670,000 to Php 750,000 per square meter.
However, OFWs have also expressed concerns regarding the increasing prices of real estate properties, fearing that their income will not be able to support it. For this reason, developers must find a balance in urban planning, where they will be able to generate profits while still offering affordable housing.
Commercial is Making a Comeback
While the work-from-home or hybrid setup remains popular among employees, employers are favoring a return-to-office movement, influencing the demand for office spaces. As an incentive for their employees to report back to the office, companies are opting for more premium workspaces that promote work-life balance like private gyms, game rooms, and cafes.
Traditional business districts such as Makati, Ortigas, and BGC still enjoy an increase in demand, but companies, especially those in the Business Process Outsourcing industry, has started to explore workspaces in less expensive areas such as Bulacan, Cebu, and Bacolod.
Resurgence of Tourism
The country’s impressive GDP growth and improved infrastructure have contributed to the gradual return of tourists, which is a welcome development for hotels, rental houses, and retail areas. As of October 2023, foreign visitors reached 4.4 million, compared to the 2.65 million tourists during the previous year.
Retail isn’t out of the woods just yet, as the landscape continues to evolve with the growing popularity of e-commerce and malls beings advised to rethink how they use space to bring in more foot traffic.
What the Future Holds for Real Estate
Market trends are expected to continue shaping real estate development in the Philippines. For instance, industry insiders expect the housing market to keep its upward trajectory, as long as the economy and infrastructure projects also move forward.
Hybrid work setups will give rise to new workspaces, as with the increase in employment rates and the expansion of commercial properties.
Foreign investors are likely to continue showing interest in Philippine real estate, with major investments and potential trade agreements coming from Japanese firms.
Investment opportunities are expected to reach an all-time high in the years to come. As the country continues to recover from the pandemic, urban planning will likely be one of the top priorities for real estate developers. Factors such as the boom in luxury residential spaces in Metro Manila, the expansion of companies in key CBDs and untapped emerging cities, plus the resurgence of tourism in the country, will ensure that the housing market remains profitable in the years to come.
Designed for Success
Philippine real estate is poised for success. However, sound investment strategies must be put into action, from doing market research to project planning, and property design to sales and marketing.
- Market Analysis – This involves the gathering of data on market trends, demand for real estate investments, and what the competition is doing. Proper analysis of the data will lay the foundation for your success, as this will help you spot opportunities and make informed decisions. Market research will also help you get a better understanding of the needs and demographics of the target market, including the economic factors which can influence the real estate demand. Having a solid field knowledge may also point you towards fringe locations that prospective buyers search for. Being constantly updated on market insights, as well as national and local news, will provide Meanwhile, doing a competitive analysis gives you a much-needed edge because you will be able to differentiate yourself from what other real estate developers are doing. Being prepared with the ins and outs of the industry also helps in shaping a future-oriented mindset, as it provides the tenacity needed to navigate through the ups and downs, and the upper hand in future-proof investment options.
- Financing – Financing real estate investments can be done through securing loans from local banks or other financial institutions, attracting investors to provide capital in exchange for equity or share in the profits, and public-private partnerships where private developers can work together with government entities as a way to finance real estate development.
- Planning – Defining the scope of the project, objectives, and timeline is crucial in the project planning stage. This includes identifying a set budget, securing the necessary approvals and permits, as well as listing down the potential risks and ways on how to mitigate them.
- Designing – The design involves the architectural drawings, aesthetics of the interior and exterior of the structure, floor plans, etc. It is an absolute must for the designs to be well-thought-out, not just to enhance the overall appeal and functionality of the property, but to ensure that the structure complies with building codes and regulations.
- Sales and Marketing – Once the property development has been completed, the next step is creating awareness and interest. A unique branding and compelling messaging must bring out the features and benefits of the property to capture the attention of the target market. Nowadays, a variety of marketing channels may be utilized, such as traditional advertising, social media, online platforms. It is also ideal to have strong relationships with real estate brokers and agents to gain access to their networks. Showcasing the value and potential profits from your investment can be done with the right sales strategy.
By understanding the process and implementing the correct strategies, real estate developers will be able to maximize their potential in real estate while addressing the country’s housing deficit.
Among the national real estate developers in the country today, PHINMA Properties emerged as one of the best, having won two prestigious awards for outstanding design and housing developments in 2023. Realizing the growing need for affordable housing and increasing opportunities in real estate, the company focused on creating exceptional living spaces that emphasize superior design and the well-being of buyers with property developments such as PHINMA Maayo San Jose, PHINMA Maayo Tugbok, and Likha Residences to name a few. Being recognized for these awards highlights the company’s commitment to excellence in both premium and affordable housing, property development, and interior design that embody the unique heritage and tradition of Filipinos.
PHINMA Properties has partnered with De La Salle – College of St. Benilde to create a housing design competition that challenged the country’s future architects to showcase their creativity and design sustainable homes for the growing middle-class population. Initiatives such as this will ensure that young visionaries will have a platform to show the world what the Filipino can do — just like the world-class real estate developer that is PHINMA Properties.
PHINMA Properties reiterates its commitment to addressing the housing challenges that Filipinos are facing by offering dignified housing options that incorporate sustainable design, nurturing a strong and thriving community, ensuring that they experience the finest in Filipino living.
Contact PHINMA Properties today if you wish to explore exciting real estate development opportunities or you are in need of professional expertise for future projects. You may also visit phinmaproperties.com to explore the available residential developments.
