Here’s our summary and commentary of this month’s Jones Lang Lasalle Philippine Property Market Monitor, July 2017 issue. In it, you’ll find some interesting insights that may help you decide on where to focus your time, money and resources when it comes to the real estate business for the next 6 months.
- Among the target buyer segments you might want to focus prospecting on are the overseas Filipino workers (OFWs) and the so-called millennials. Currently, only 10 percent of the OFW market has so far been tapped. With the current financial literacy programs conducted here and abroad, we can expect the percentage to go up and we are here to help our OFWs in their investment choices.
Commentary: This presents a huge opportunity for real estate agents.
3 Key Reasons:
- Spending power: It’s no secret that OFWs tend to earn at least 3x more than if they were working locally in the Philippines.
- Motivation: If you talk to any OFW, you’ll soon be talking about their dreams to move back to the Philippines for retirement or to have more money and perhaps start a business. In all cases, these are life events that will require housing.
- Hard to find answers: There’s a huge shortage of good credible information online on how OFWs would go about the process to find and purchase real estate. This leaves a big opportunity for real estate agents if they take their online presence and becoming a trusted advisor seriously.Aside from residential condominium investments, OFWs are now investing in condotels. These are condominium units pooled together and operated as a hotel. Since its introduction, condotels have become more popular especially among OFWs because they see this option as a truly hassle-free investment.
Commentary: Makes sense right? Condominium projects typically offer flexible payment plans and OFWs typically don’t need it “now” and tend to buy for the “future”, therefore making the process easier if they can find the right realtor that they can trust to help them through the process.
- The growing number of tourists in the Philippines boosted the interest of OFWs to invest in the tourism industry by investing in condotel developments.
- Millennials continue to dictate retail spending in the country since they have high disposable incomes and have overtaken the baby boomers in terms of demographic size. Affordability will be a major consideration for millenial buyers. Thus, house-and-lot packages ranging anywhere from P2.5 million to P3.5 million will move because of the relatively smaller monthly amortization that will still allow millenial buyers to use a portion of their resources and funds for other personal and family needs.
Commentary: This is another good opportunity for real estate agents to target local buyers. The rising spending power of the next generation can give your real estate business a healthy long-term forecast.
- Solid macroeconomic performance of the country’s GDP, continues to show impressive growth posting a 7.1-percent mark in the third quarter, making the Philippines the fastest-growing major Asian economy, outpacing its neighboring Asian countries—China 6.7 percent; Vietnam, 6.4 percent; Indonesia, 5 percent; and Malaysia, 4.3 percent.
- Citing Urban Land Institute’s Emerging Trends in Real Estate 2017, Santos said Metro Manila will experience continuous growth with Manila being ranked third in investment and fourth in development among 22 Asia-Pacific countries.
- Santos Knight Frank said the country’s IT-BPM industry will expand across the country in “new wave cities”, such as Clark, Cebu and Davao. In Clark alone, Global Gateway Logistics City is being positioned as a state-of-the-art, master-planned, mixed-use development that will add 300,000 jobs through locators when completed. “With 1.6 million square meters of office space under way in the Philippines this year, the need for employee housing continues to rise.” He also explained that the office sector benefited from the property boom, as demand for office spaces was sustained in the fourth quarter of 2016. Overall vacancy rate continues to drop, with the fourth-quarter vacancy rates declining to 1.48 percent, from 3.7 percent in the same period last year. This is amid new developments being turned over in the last quarter of the year.
Commentary: With millenials being the primary workforce of the IT-BPM industry, this is more supporting evidence of a strong local market. Typically, millenials haven’t found a “trusted advisor” for their real estate needs so this would be a good area to focus if you represent the right product.
- Makati CBD Central Business District remained to have the highest asking rates among all major CBDs in Metro Manila. Weighted lease rate of Makati CBD is now pegged at P1.226.57, followed by Bonifacio Global City, with P931.28 and Quezon City, with P710.98.
- Other areas on the list are Bay City, with P691.28; Alabang, with P666.81; and Ortigas, with P631.24.
- Alabang vacancy rate is now on its lowest at 1.65 percent compared to last year’s double digit of 17.07 percent. On the other hand, Makati dipped slightly, from 1.31 percent to 0.88 percent.
Commentary: If used correctly, this is good insight to help you identify how strong you can negotiate to keep your rental rates at the price you want.
Tech Guy & Real Estate Investor super passionate about helping real estate agents, brokers and developers grow their business to reach new levels of success.