How Healthy Is Real Estate in the Philippines For Investment?
From a consumer’s perspective, factors such as housing provision for employees who desire to live near their offices, high remittances from OFWs, and increasing urban population catalyze the demand for condominiums, residential units, and other businesses that cater to the needs of homeowners.
For investors, the increased demand for new residential and mixed-use units both within and outside of Metro Manila gives them massive motivations to invest.
New projects and developments initiated by the government like the enhancement of road networks, construction of MRT connecting QC to Bulacan, and expansion of airports are some of the factors that should drive the development of real estate projects even further.
In the last few years, various constructions for new condominiums and residential were observable, both by private investors and huge corporations.
Even small enterprises appear like wild mushrooms around areas that are being readied for development.
Real Estate Investment Ideas to Make & Best Locations
At times, reinventing the wheel is not necessary—we only need to have it reoriented. The same old methods and approaches are still effective when it comes to real estate investment. This section categorizes a few of the most tried and tested ideas for making money in real estate.
Residential Property
Over the last few years, the real estate market displayed a remarkable expansion. Millennials, in particular, are amplifying its growth to fill their needs of being near their jobs and avoid the heavy traffic.
Also, people are more willing to reside in condominiums as families are now getting smaller, and it makes it more convenient.
In 2017, 52,000 residential units were pre-sold, 24% higher than the previous year.
The high-end residential segment experienced a 28% year-on-year growth.
And it’s not only Metro Manila encountering growth. The demand for residential properties is also being faced by cities such as Davao, Cebu, Iloilo, Bacolod, Baguio, and others.
The gist is, the demand for residential properties is still rampant, and it is still strategic to invest and earn from it.
Another reason is that more and more individuals, singles and newlyweds alike, are considering starter homes and affordable housing as their property investments. This enables them to pay for amortization (asset) instead of paying for rent (expense).
Retirement living is also one of the leading inspirations for people to purchase real estate properties.
As stated by Bryan Villarosa, a licensed real estate specialist, “Retirement is one of the top reasons for big-ticket investments. They want to maximize their pensions and want to live in rising centers in the Philippines. They consider the cost of living, avoid bad traffic conditions, a community that has a township concept where malls, parks, churches, sights, and hubs are in.”
Vacation Home In Tourist Destinations
The Philippines is among the most famous tourist spots in the world. Breathtaking views, rich flora and fauna, and spectacular destinations await travellers, be it local or abroad.
Cebu, Aklan, Bohol, Palawan, Camiguin, Batanes, are just some of the most famous spots where numerous tourists flock yearly.
And what do you think these tourists require and desire? That’s right, a place where they can stay at the end of the day! In 2016 to 2017 alone, the Philippines posted an impressive 30.68% earnings growth rate in the travel and tourism sector, as reported by the Department of Tourism.
Warehouse
The growing e-commerce industry augments the increased demand for storage areas and warehouses by online shopping platforms.
Besides that, our country’s retail industry remains sturdy. It is estimated to add 630,000 sq meters of land in the coming years.
The consumers’ demand for hassle-free and easy online shopping fuels the logistic industry. In return, the industry experiences tremendous growth.
Major players, such as Ayala land, the Villar Group, Double Dragon (co-chaired by Mang Inasal founder along with Jollibee’s chairman), Anchor Land, have taken notice and started doubling down on real estate logistics investments. They are purchasing key assets meant for the construction of huge warehouses to cater to the needs of the logistics market.
Condominium for rent
Condos are still deemed profitable as seen on the steady increase and demand in the number of condo projects being built.
Condos are perfect for rentals that cater to starting families and students (as well as for AirBnBs targeting people visiting the metro for business). It is also ideal if the condo is near business districts like BGC and Makati.
The biggest part of the market share comes from the mid-end segment, which makes up 64% of the totality. High-end condominium projects take 24% followed by affordable and luxury markets at 10% and 2% respectively.
Empty lot on main roads
It can be found in all places. Remnants of land left idle, sometimes crammed between commercial or residential spaces.
Some of these empty lands have the potential to be commercially successful; you only have to distinguish which type of investment it will be suitable in.
Other factors, such as price and safety, must also be considered. Be meticulous in making sure you are securing legitimate paperwork from its seller.
Dorms
You’ll never lose occupants if you have an ideal and appropriate location for a dormitory – preferably nearby hospitals and/or schools.
Students are always searching for an accessible and secure place to serve as their home away from home.
Low-rise commercial buildings
Low-rise commercial buildings can be a profitable investment. It may be a bank, or a string of commercial units rented out by coffee shops, mini-marts, food stalls, and others.
Rental contracts last from 5 to 10 years (for banks) so if you happen to obtain a deal with one of them, you are guaranteed to a steady-paying tenant for a certain period.
Or you can propose to lease them as office space, as the Philippine property sector discloses a growth of 4.3% year-on-year in Metro Manila.
Indeed, the real estate industry in the Philippines is thriving amid the recent challenges. If you’re interested in starting out as a property investor, consider inquiring with LYONS Realty Corp., a trusted brokerage firm in the Philippines dedicated to providing fresh perspective and ideas for a new approach in providing top-notch service to every real estate client. Contact us today and get your dream home in no time.
