Real estate development outside Metro Manila has promising outlook this 2019
Recent articles here on Property Access has reported the promise of the real estate industry in the country. (SEE: Quezon City leading in real estate market surveys; Manila: A Hotspot in Luxury Real Estate)
Metro Manila looks promising in terms of development but real estate services Colliers International reports that the real estate sector should look outside the capital. (SEE: Iloilo Market Potential Looking Up, Anflo Industrial Estate Corp: A World Class Industrial Park in Mindanao).
According to Colliers International, the real estate sector should take advantage of the government’s Build, Build, Build program which they foresee will sustain the country’s growth in the next 2 to 3 years or so. They recommend developers to align their developments with the program and focus on areas outside the capital that are likely to be fueled by major infrastructure projects.
Areas like Cavite is seen to become a potential business hub (SEE: Megaworld develops Cavite). Colliers also reported that Pampanga should groomed to become a primary investment site given the limited amount of developable land in Metro Manila.
Moreover, about 54,000 residential condominium units were sold in Metro Manila pre-sales market in 2018, beating the 53,000 units sold in 2017. By 2019. A slowdown in condominium unit sales is expected to occur given the drop of condominium launches which is due to the lack of developable land in Metro Manila’s major business hubs and the rapidly rising prices of land.
However, Colliers saw a sustained demand for House & Lot projects in key areas outside Metro Manila such as Tarlac, Nueva Ecija, Cavite, Laguna, Batangas, Bacolod, Cebu, Iloilo, and Davao.
Colliers also predicts hotel occupancy to rise after attracting a total of 7.1 million international tourists in 2018. While this number is lower than the projected 7.4 million visitors, it is still much higher than the 6.6 million foreign visitors recorded last 2017.
Various developers such as Ayala, Filinvest, 8990, Rockwell, and Vista Land have recognized this demand for hotels and have started developing their own hotel brands. Foreign brands are also expected to open over the next few years which include the new Mandarin Oriental in Makati CBD, Hotel Okura in the Bay Area, and Ibis Styles hotel in Araneta Center.
While the Philippines’ real estate industry looks promising, Colliers warns that a lack of skilled construction workers could stall development plans in the country. The potential delays in public project implementations due to the election ban and the delay of the 2019 national budget can also slow down development.