Why You Should Invest in Philippines Real Estate
"Investing in real estate is not only the best way, the quickest way, the safest way, but the only way to become wealthy."
Those who have amassed enormous wealth in real estate will tell you it is one of the safest and speediest ways to a wealthy lifestyle.
The Republic of the Philippines is a country located in Southeast Asia. It is a part of a large chain of islands (7,107) located in the Western Pacific Ocean. Its capital city is Manila and is extolled as a rising star due to enormous growth over the past several years.
The Philippines has enjoyed a very active real estate market, continuous BPO investments and high sustenance from OFWs (Filipino Exports), explains the country's continual growth.
Growth in various developed countries and regions, such as Japan, the Middle East and Western countries, are not showing great promise. This echoes the debt crisis and the US Recession that was experienced in December, 2007. The US and other developed countries are currently not ideal locations to invest in blue chips, government bonds, life insurance and bank deposits. These investments are not stable and are offering insignificant returns for investors.
Due to the downward slope in real estate in developed nations, emerging economies for property market investments are becoming more attractive for investors. After the 2008 financial crisis, appeal has shifted focus from developed nations to developing nations. Developing nations are becoming very established and growing quickly in market economics.
The Facts In Real Estate
Long term security and wealth are the biggest reasons for home ownership. Real Estate property cannot be stolen, lost or carried off. Purchasing real estate, paying it off in full and taking care of the property is an excellent and safe investment. This brings us back to the Philippines and investing in their real estate. Investors want to know if this is a wise investment and the future of investing in numerous realities, including condominiums that have burst onto the scene.
Investing in Philippine's real estate is financially rewarding and here are few reasons why.
Despite right and left charges of corruption and various controversies such as disbursement acceleration funds and pork barrel funds, Philippine politics is and will remain very strong according to Philippine analysts. There will be no impeachment charges brought against President Noynoy Aquino anywhere in the near or distant future. The democratic political institutions and arena are actually becoming stronger with each passing day.
Huge housing backlog
Among 100 million locals, the country has massive supply and demand. This continuing trend has given a great deal of strength in Philippine real estate, including mass housing and mid-range sector housing.
Government leaders are expected to approve long-term mass housing loans with lower interest rates. This is extremely appealing to many people wanting to invest through the purchase of a home. Teachers, educators, military and soldiers, farmers, professionals, factory workers and OFWs (overseas Filipino workers), to name a few.
After just receiving their "BBB Stable" credit rating, the Philippines is growing very quickly and economically throughout the world. They have shown significant ability to paying debts on time and in full. Having a Stable rating also means a strong outlook that will not be changing any time soon. The rating has actually predicted increases over the next couple of months due to its economic growth and reforms. The country is experiencing a very stable financial standing for potential investors over years to come. Rivals, Gloria Macapagal-Arroyo and President Noynoy Aquino have worked together for long-term economic stability and growth throughout the country. This will result in better conditions within the real estate investment community.
With both economic and population growth, many urban areas in the metro and nearby, large cities are undertaking extensive urban redevelopments and renewals through private developers (Ayala, Megaworld, Robinsons, SMDC and Filinvest) and local government officials. Due to the huge demand for housing, real estate investments are showing great promise for local and foreign investors. Investors want to cash in on the positive grown of the country.
Upgrading of the country's infrastructure is believed to accelerate, opening the way for higher levels of positive thought among the real estate industry.
Increase in OFW remittances
Foreign exchange earnings from Filipino workers overseas is giving a large cash flow into the country, adding more to its stability. Some of OFW's income is placed down on real estate investments, along with funding sari-sari stores and child education. Many overseas workers are making wise investment decisions in real estate. Local developers are sending sales teams and creating marketing offices abroad where many Filipino workers are located.
Rise in foreign investors and buyers
With a very relaxed and affordable lifestyle along with economic and political stability, foreigners are investing in local condominium units. According to experts, this positive trend will lead to an increase in foreign buyers. Experts believe this is just the beginning of positive growth within the country. The Philippines has the lowest foreign direct investments among all Asian countries, including Cambodia and Myanmar.
Lower interest ratesAlong with great prospects for value appreciations and stable rental incomes, they also offer lower bank interest rates, allowing families and professionals to start purchasing real estate properties through housing loans. Realty developers also have access to lower bank interest rates, thereby allowing for flexible in-house financial deals and bank financing tie-ups.
Unlike a few developers who were responsible for the 1997 Asian financial crisis, real estate developers, today, are stronger and wealthier. Foreign buyers are looking to cash-in on Philippine real estate which will lead to excellent profits.
Tourism is an important sector for the Philippine economy, contributing 7.8% to the Philippine gross domestic product (GDP) in 2014. Recent tourist boom has led many locals to rent out their apartments to visitors for short-term stays. Philippines has long had a reputation as a cheap place to live, especially when compared to other major Asian cities. But recently, soaring rents have threatened that image. The rise in prices has been exacerbated by the popular practice of renting out apartments exclusively as vacation accommodations.
Philippine Peso Stability
Strong and steady appreciation has given investors a positive sign for investing in this booming economy. Their money has shown a much more stable growth than that of the weakened US dollar.
Rise in call centers and BPOs
The Philippines remains as a top business process outsourcing (BPO) destination for the estimated $150-billion BPO industry. The Philippines is considered as location of choice due to its less expensive operational and labor costs, as well as having a highly skilled workforce, proficiency in American-style English and idioms, strong affinity with U.S. and European cultures and a constant stream of college-educated graduates entering the workforce. This boom creates an ever increasing demand for office spaces and buildings, call center as well as housing for BPO employees, who are amongst the high income earners in the country.
There you have the reasons to invest in the growing Philippine real estate. Study your options well and do your homework in terms of choosing the right developer with whom to invest your hard earned money. And to make an informed decision, you may want a honest advice from our professional, licensed and bonded real estate brokers. Call us up today!