Monday, September 23, 2019

Here's Why Investing in Properties In The Philippines Is a Good Idea

Wazzup Pilipinas!

As one of the world's fastest emerging markets, the Philippines has become one of the countries where investors look for great investment opportunities.

The substantial rise in acquiring interest from the international market has continuously risen, as seen from the increase in the purchase of condominium units by expatriates, foreigners, and multinational corporations.  But why is investing in real estate properties in the Philippines a good idea?

The demand for Philippine properties remains strong

Because of the growth of the BPO sectors and the influx of Mainland Chinese in the country, the need for residential properties, both from the workers and the expats of the companies, increases as well.

By the law of supply and demand, because there is static supply and the market’s demand is high, the rental rates are steadily increasing. The vacancy rate is at its lowest that’s why a record-high of 54,000 pre-sold condo units were sold last year in Metro Manila.

Another sector contributing to the growing demand for office space is the Philippine Offshore Gaming Operator (POGO) landscape. Megaworld Corporation, the top lessor of office space in the Philippines, has already leased 80,000 square meters to POGO operators.

POGO requires a lot of office space for their back office, customer support operations, IT and technical support. As reported earlier this year, POGOs and BPOs have been fighting for limited office space in Metro Manila, and the result was an increase of as much as 300 percent on rental fees.

The Philippine economy continues to expand

Figures coming from the Philippine Statistics Authority (PSA) states that the country is still among the fastest-growing economies in Emerging Asia, with an average annual growth rate of 6.2% in 2018.

An excellent hedge against inflation is in real estate investment. Philippines’ properties rental income and its investment value increase as the price level increases due to inflation. It implies that both the immediate and long-term impacts of inflation protect investors.
Cost of property is one of the lowest in Asia
In fact, according to the Global Property Guide, the average price per square meter of a condo unit in Manila is approximately $2807, making the Philippines the third least expensive country for real estate investment.

Philippines won’t see any price correction and real-estate bubble in the future, even with comparatively low prices, as the economy is continuously climbing at an impressive rate. Because of the low peso value, foreign investors can invest more in the real estate Philippine market.

The Philippines is a top tourist destination
The Philippines is truly a traveller’s dream. The country is known for having rich biodiversity as well as a profound cultural and historical heritage. Statistics from the Department of Trade and Industry (DTI) reported that there were 7.1 million tourists that visited the Philippines in 2018. That is a growth of 7.7% compared to the year before.

Leisure and tourism facilities are known to influence property value. Because of the volume of the tourists that needed a place to stay, there is a high yield for short term renting of properties in the area. Over time, the development of infrastructures will commence catering to many tourists, thus affecting the land value of the surrounding properties.

President Duterte’s “Build, Build, Build” Program
President Duterte launched the "Build, Build, Build" (BBB) program aimed at accelerating infrastructure spending and developing sectors that will deliver steady growth, generate employment and enhance Filipinos ' lives.

Philippine infrastructure modernization is anticipated to accelerate and work particularly well for the real estate sector, giving an additional boost and more confidence, not only in Metro Manila, but also in other parts of the county.

Good Return of Investment
Making profit is the primary purpose of any real estate investment. Philippines real estate experts would argue that Return of Investment (ROI) is the measure which is used to evaluate the profitability of an investment. It measures the amount of return on a specific investment relative to the investment’s cost. 

Unlike before, when investors only considered condo units, houses and land as suitable types of investment, investing in memorial lots are now growing in popularity as they see a high return on their investments. These investors can expect to earn 10% of their investment every two to three years.

Almost everyone can find a memorial lot for sale and purchase it because they can pay by monthly amortizations at low-interest rates. Investors can purchase memorial lots for the inevitable future, or they can resell it at a higher price later.

There is also no need for constant upkeep since maintenance of memorial lots are also shouldered by the developer, which already includes the cleaning of the area and the regular trimming of the grass. 

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