While the United States may be in the midst of a housing crunch due to the sub prime fiasco, global expatriates in Asia is still keen on real estate as an investment. One country that has seen a rise in the number of overseas property buyers are the Philippines. Specifically, they are buying second homes to be used for vacation or retirement. Not only are American, British and Australian expats looking at the archipelago for second homes, expatriate Filipinos are heading home in droves to invest their money in luxury properties; Filipino expats are the largest group of second home buyers in the Philippines.
But what’s fueling this growth in the Philippine luxury real estate market?
Industry experts point to the explosion of the country’s business process outsourcing (BPO) industry. Since Protected content , revenues for the Philippine BPO sector have exploded from US$24 million to an impressive US$2.6 billion in Protected content , making it third behind China and India; revenues in the first half of Protected content already hit US$5.8 billion. As the decade wraps up, the BPO industry show no signs of slowing, especially with the Philippine peso holding strong and increased stability for the entire economy – by Protected content are forecast to hit US$11 billion.
The recent growth spurt in the Philippine outsourcing industry has been largely fueled by high value outsourcing including legal services, web design, medical transcription, software development, animation,and shared services instead of low cost call centers. BPO is not the only sector of the economy showing strong growth potential. Overall economic growth for the country is anticipated to average 5.7% per annum between Protected content 2012.
Riding on the back of political stability and a strong currency, real GDP growth hit an impressive 7.3% in Protected content . This expansion has been reflected in continued strong consumption growth and upward movement in the property market. A slight acceleration in investment growth compared with the past few years is also expected, while private consumption should remain the key driver of the country’s economy during this period.
Additionally, the Philippines boasts a liberalized and business - friendly economy that is ripe with opportunities, adding further growth potential and an increase in foreign expats. The nation features an open economy that allows 100% foreign ownership in almost all sectors and supports a Build-Operate-Transfer (BOT) investment scheme that other Asian countries are rushing to emulate. Government corporations are being privatized and the banking, insurance, shipping, telecommunications, and power industries have been deregulated to pave the way for future growth and stability.
“Live Your Dreams” in the Philippines
International workers have long enjoyed the expatriate lifestyle through out Asia. Exotic cultures, exciting cuisines, varied travel opportunities, and high salaries have resulted in a relatively high quality of life. While salaries and the list of perks in most expat packages have declined in recent years owing to the increase in local talent, most are still quite generous. At the same time, an affluent class has arisen in several Asian countries. With cash to invest, many Western expatriates and newly wealthy Asians, including expat Filipinos, are looking to real estate as an effective means of meeting their financial and aspirational lifestyle goals.
To compete with other regional destinations, the Philippines has developed communications, infrastructure, and service delivery systems specifically geared to meet the needs of foreign retirees and vacation home seekers. The “Live Your Dreams” campaign highlights the many advantages of the country for second home purchases. Keen on driving investment in second homes in the Philippines, the country’s tourism department will again participate in the upcoming International Property and Investments Show to be held October Protected content , Protected content the COEX in Seoul, Korea. Following on the success of last December’s inaugural Asian International Real Estate Expo and Conference (AIREEC)in Manila, this year’s conference will focus on “The Business of Global Second Homes and Resorts” and will host nearly 3, Protected content players in the second, retirement, and vacation homes industry, as well as hotel and resort developers, investors, and contractors from over 30 countries.
In light of recent problems in the American housing market, some potential investors may be leery of property as an investment. But many Asian countries, like the Philippines, have been largely insulated from this situation, making them ideal locations for property investment.
According to research done by property developer Jones Lang LaSalle, the 12-month outlook for the residential sector around Manila is “moving upward, as evidenced by rising rents and selling prices. Buyers are still optimistic about appreciation of capital values due to the higher selling prices in the secondary market.” For instance, in the metro Manila area a Protected content foot flat can be purchased for around US$60,000, which is considerably cheaper than most Western countries. More importantly, from a value for the money perspective, that same flat can generate up to 14% per year return on investment from rental returns.
Choices for Every Taste
As the old maxim goes, the three most important things in real estate are – location,location,location.
In the Philippines, foreign buyers can find all their leisure and investment needs taken care of in one place. Those who chose to make the Philippines their second home will enjoy the company of the warmest people in the region, the country’s openness to varied cultures, and a decidedly global outlook. With higher education as a priority, the literacy rate in the country is 94.6% - among the highest in Asia. English is taught in all schools, making the Philippines the world’s third largest English-speaking country.
Featuring some of the best sun, sea, and sand in the region, the Philippines is also teeming with the best of western amenities. To help round out the lifestyle experience, the country offers many accessible and affordable luxuries – business centers, housing, schools, hospitals, shopping malls, hotels and restaurants, beach resorts, and recreation centers.
Located within four hours flying time from many major regional capitals, the Philippines is a natural strategic location for expatriates and retirees who want fast and convenient access to region and its vast cultural and travel opportunities.
According to developers like Ayala Land, numerous areas have been enhanced and primed with new property developments to meet the growing demand for luxury second homes. The Philippines has always been a place of striking natural beauty and a crossroads of eastern and western influences. The country has over a hundred ethnic groups and a mixture of foreign influences which have molded a unique Filipino culture. Even as one of the most westernized of Asian countries, there is also a rich foundation of Malay culture beneath the patina of Spanish and American heritage that makes the country a unique destination for tourism and settling down.
An archipelago like the Philippines offers a diverse natural environment, from land to marine to mineral. From Cebu to Boracay, the 7,107 islands boast beautiful beaches and breathtaking scenery that are ideal leisure and relaxation spots for vacationers and tourists alike. It is home to 2,145 fish species, four times more than those found in the Bahamas, and numerous species of exotic animals like tiny Tarsiers and sea turtles. It is also the biggest copper producer in Southeast Asia and among the top ten producer of gold in the world.
For those looking to invest in a leisure vacation or retirement home, the lower cost of living and real estate in the Philippines, coupled with its exotic natural beauty and booming economy makes the country an ideal location to feel secure, welcome, and at home. Making your dreams a reality is what life is all about. Leveraging the many wonders of the Philippines to make one dream – that of owning a vacation home in an exotic locale – come true is what savvy investors are doing.
The Philippines is the “hottest” real estate market in Southeast Asia right now, according to Trent Frankum, general manager of CB Richard Ellis (CBRE) Philippines, an international commercial real estate firm.
ETON CITY - The New Makati
The major drivers of this positive trend, according to Frankum, are the stable Philippine peso, the growing tourism industry, the boom in business process outsourcing (BPO), and the increasing investments of overseas foreign workers in properties in the country. Joey Radovan, vice chair of CBRE Philippines, adds that the reason for the country’s popularity among foreign property investors is price. “We’re not yet overpriced, we’re still cheap,” the real estate executive was quoted as saying by the Philippine Daily Inquirer. Singapore properties are three to four times more expensive than Manila