Have you ever thought of investing in the Philippines? As the locomotive of the global economy, South East Asia has always been popular among foreign investors. Speaking of investment hotspots in South East Asia, one would think of Thailand, the Philippines, Cambodia, Vietnam and Malaysia. In addition, most South East Asia countries are gaining popularity due to their low investment threshold, low holding cost, demanding market and simple transaction process.
The Philippines has one of the best asset appreciation and rental incomes among all South East Asia countries. What are the keys you should look out for those looking to invest in the Philippines real estate market?
With a population of over 100 million, the country has a massive labour force which is also a great advantage and possesses great potential for economic development. According to the Philippine Statistics Authority (PSA) record, back in April 2022, the labour force participation rate reached 63.4%. Such advantageous demographic condition is vitalizing the economic development, driving the growth of DRP, and improving the Philippines' global competitiveness, ease of doing business index and global rating.
Real estate in South East Asia must be at the top of your list if you are looking for an investment that can bring you high ROI while investing low capital. According to the Global Property Guide, the total rental yield in Manila remains positive. It ranges from 7.01% on 45 sqm to 7.16% on 7.16sqm.
February, in this particular report, the rental yield of Manila, Philippines, ranges from good to excellent. Take Bonifacio Global City as an example; one can get a rental yield of 5.65% for a 45sqm condominium unit.
Investing in the property located in CBD is significantly advantageous in terms of asset appreciation, resale, occupancy rate and rent-to-price ratio.
Makati, the established CBD in the Philippines, has been the icon of the wealth and prosperity of Manila. The area is well-developed. With relatively scarce land, and an imbalance between supply and demand, housing price continues to rise.
Besides, Ortigas CBD is the home to the business process outsourcing industry, the backbone of the Philippines economy. Besides, it is also the home to many listed companies, high-end businesses, and white collars. Thus, the demand in terms of renting and selling is significantly high.
According to Leechiu Property Consultants (LCP), a Philippines real estate brokerage services company, these are the critical development of the Philippines housing market in 2022 Q1:
(1) Developers are optimistic about the real estate market: The net income and capital expenditures budget is increasing. These are evidence of developers' confidence in the market.
(2) Strong housing demand: As of the first quarter of 2022, the total number of residential units delivered in Manila reached 46,700, with only 13,500 unsold, which means only 2.89% of the existing houses are available right now.
(3) A surge in residential property: The number of new residential properties reaches 4,762, a 70% surge compared to 2021 Q4. The transaction volume is higher than the opening amidst the pandemic. This, again, proves that there's a shortage of housing units in Metro Manila.
(4) Mid- to high-end housing transaction volume is leading the market: Regardless of the pandemic, mid and high-end residentials priced between 4 million to 7 million pesos are the hottest among buyers.
(5) Stable asset appreciation: Rent fell at the beginning of the year due to Omicron; however, the property value is rising in Manila CBD, surpassing the pre-pandemic level.
Investing in the Philippines sounds very promising for investors! Why not take a look into the hottest property area in the Philippines? Contact our team of professionals now!
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