Promising overall economic projections in SEA
With Southeast Asia’s strong gross domestic product (GDP) numbers and promising overall economic projections, the region has caught the attention of many investors.
Part of it is also due to the low cost of operations and emerging markets, which makes the region attractive despite the higher interest rates worldwide.
At the heart of Southeast Asia, the Philippines exemplifies the best offerings of the region: its capital has a booming office sector, and its major cities are business process outsourcing hubs.
Economic growth in the Philippines is one of the fastest in the region
Given these, analysts project that the Philippine economy could grow to as much as 5.8% this year, making it one of the fastest for the region.
Residential real estate showing a huge capacity for development
Central to this development is the Philippines’ property sector. Among other investments, properties dictate a country’s capacity for development, which is why there is a rising interest from real estate investors.
Real estate as a key economic driver in the Philippines
In the Philippines, real estate is one of its key economic drivers. As such, owning property is more than asset-building; it is also a gateway to success, particulary in the Philippines.
Perks of Real Estate Investing in the Philippines
Real estate in the Philippines is a growing industry that brings in billions in GDP each year.
Most of these revenues are mostly from the growing middle-income segment and the sustained remittances from overseas Filipino workers (OFWs).
Opportunities in residential and commercial real estate investing
As such, both residential and commercial real estate properties have ample opportunities for investors to diversify their portfolios.
The country has multiple key urban cities where demand for rental properties is stable, and the potential for steady cash flow is promising.
Moreover, the growing economy and population means a sustained demand for housing and commercial spaces, ensuring a stable income stream for investors in the long term. Buying properties after a thorough research, is becoming more and more plausible investment option.
As a tangible asset and a physical property, there are many benefits to adding real estate properties to your investment strategy.
Below, we list the primary advantages of real estate investing in the Philippines.
High margins in passive income
Investors who aim for high profit margins in real estate have more chances of realizing this goal in the Philippines.
Lower entry cost compared to other Asian countries
First off, the Philippines has a relatively lower entry cost compared to its neighboring countries. Aside from this, real estate properties in the country also have a high potential for appreciation.
Sufficient market research can help investors find ideal real estate investments at a relatively low purchase price, which they can later sell at a much higher price.
Benefit from pre-sale options
Moreover, investors can further benefit from developers that offer pre-sale options for a real estate property.
With property appreciation, investors still earn without doing anything as the market value of their properties increases. They can then use these properties as leverage for loans to finance other ventures.
Earn from passive income
Aside from increasing property values, another way to earn more passive income is by renting out real estate investments.
Investors could especially benefit from the rental income of properties in high-demand rental markets, further bolstering profit margins.
Increasing the property’s market value
Lastly, diligent management and enhancement of properties can also increase their market value, which means higher prices upon resale.
Booming business districts
Central business districts are one of the most critical elements for the country’s development. At present, the Philippines hosts a number of prosperous business hubs outside of Metro Manila.
Next wave cities in North and South
For instance, North Luzon has Clark and the south has Laguna, which are touted to be the next best investment destinations.
Prime investment destinations in the Visayas and Mindanao
Outside of Luzon, there are also progressive cities that stand out as prime investment destinations. The extensive list includes Cebu City, Iloilo City, and Davao City, to name a few.
These vibrant and rapidly developing business districts present lucrative opportunities for a real estate investor.
These districts come with a robust real estate market fueled by the presence of multinational corporations and thriving local businesses. With this also comes the growing demand for commercial and residential spaces.
Heightened infrastructure development and urban renewal
Moreover, government infrastructure development and urban renewal further enhance the appeal of these areas to real estate ventures.
With more companies establishing their presence in these booming business districts, the demand for office spaces, retail outlets, and residential units continues to soar.
Hotspots for real estate investors
As a result, they become ideal targets for savvy real estate investors seeking high returns on their investments.
Promising residential properties
Apart from commercial properties in business districts, residential properties in the Philippines also present a compelling opportunity for stable returns and capital appreciation.
The growing population ensures demand for housing
The country’s middle class is expanding, and its population is growing, which ensures the demand for housing.
To illustrate, property prices in key urban centers like Metro Manila, Cebu, and Davao have shown consistent growth over the years, which offers investors the promise of returns on their investment.
Steady income stream from leasing out properties
In conjunction with this, the demand for rental properties remains high enough for investors to earn a steady income stream.
Moreover, the Philippines is a tropical tourist destination that beckons millions of international travelers each year.
Demand for hospitality and leisure properties is increasing
With the country’s stunning natural attractions, rich cultural heritage, and increasing popularity, there is a steady demand for hospitality and leisure properties.
Investors can capitalize on this by investing in hotels, resorts, and vacation rentals, thereby diversifying their real estate portfolio.
Commercial real estate buoyed by the influx of tourists
Additionally, the rise in tourist arrivals drives secondary businesses such as retail and entertainment, further enhancing the commercial real estate value in key tourist hotspots.
BPO readiness
The Philippines plays a critical role in the global business process outsourcing (BPO) industry. When 2023 closed, BPO revenue was estimated to be around $35 billion.
Expansion of BPO operations in the country
For 2024, analysts expect these numbers to grow between 7% to 8% as vendors continue to expand their operations.
This readiness for BPO presents a significant advantage to investors, particularly in the commercial real estate sector.
The Philippines’ major cities come with robust infrastructure and amenities necessary to support BPO operations, making them prime locations for commercial properties.
CBDs offers the right environment for BPO companies
Moreover, central business districts offer a conducive environment for BPO companies, with modern office spaces and connectivity.
Investors can capitalize on the high demand for commercial properties from BPO firms to secure stable rental income and potential capital appreciation.
Tax benefits and incentives to investing BPO companies
Additionally, the government offers tax benefits and incentives to BPO companies, further enhancing the attractiveness of investing in Philippine real estate.
Affordability
Finally, affordable properties in strategic locations make it accessible for investors to enter this thriving market and reap the rewards of the country’s BPO readiness.
Expected economic growth
Given the optimistic outlook for the Philippine economy, it now serves as a prime destination for real estate investment opportunities across various sectors.
Aside from directly putting money into real estate properties, investors can now opt for Real Estate Investment Trusts or REITs.
Under a real estate investment trust, investors have access to a diversified real estate investment portfolio, including industrial real estate, retail spaces, and office buildings.
This new investment vehicle allows for shared ownership properties, where investors can participate in large-scale developments at minimum risk and still be liquid.
Additionally, the growth of mutual funds focused on real estate assets further broadens investment options that attract both local and international investors.
The country’s expanding economy, fueled by strong domestic consumption and robust business activity, creates a conducive environment for real estate growth.
Working closely with experienced real estate professionals can help investors identify these promising opportunities and navigate property investment in the Philippines like a pro.
Get the most out of real estate investing with Camella
Connect with a reputable real estate agent who will help you find the ideal investment property in prime locations across the Philippines.
Check out Camella’s property options within its house and lot communities and vertical villages to help you make informed investment decisions.
