The overwhelming majority of Filipinos in the UAE are optimistic that the property sector in their home country is rapidly improving, according to a new survey.
A poll conducted by New Perspective Media (NPM), the organisers of the annual Philippine Property and Investment Exhibition, showed that 98 per cent of Filipinos in the UAE believe positive change is coming to the Philippines with 93 per cent agreeing that the investment environment is already improving.
According to official government figures, the Philippines was the second-fastest growing economy globally in the second quarter of this year, expanding at 7 per cent compared with the same period last year, followed by China (6.7 per cent), Vietnam (5.6 per cent), Indonesia (5.2 per cent), Malaysia (4 per cent) and Thailand (3.5 per cent). India registered the highest growth at 7.1 per cent in the second quarter.
The survey of 1,000 UAE-based Filipinos showed that 90 per cent believe “now” is the best time to invest in Philippine property, with expatriates “very optimistic” the value of their property investment will see significant gains over the next few years. Property topped the list of preferred investments with 80 per cent of the respondents choosing real estate while 20 per cent opted for the stock market, business start-ups, mutual funds, bonds and other investments.
Asked to describe the investment and business environment in the Philippines following the election of Robert Duterte as the president in June, 93 per cent said the situation is improving, 2 per cent said it is deteriorating; and 5 per cent said they do not see any change.
“A vast majority of the Filipinos in the UAE are confident in the improving investment scenario in the Philippines,” said Karen Remo, the managing director of NPM. “This is an affirmative boost to the new administration of the Philippines as the economy’s growth registers stellar performance in recent months.”
“Our survey supports the increasing appetite of the Filipinos and the international community to invest in real estate. This is in response to the positive forecasts of good investment returns in the Philippines, which is now being considered the Asia’s rising tiger,” Ms Remo added.
The strong economic growth in the Philippines is driving demand in the property market. According to Oxford Business Group, the construction and real estate sectors make up around 20 per cent of the Philippine economy, slightly ahead of manufacturing.
The Philippines provides immense advantages to potential investors who seek alternative markets amidst the global economic uncertainty, according to the Philippine property services provider KMC Mag. “With an average investment growth of 10 per cent and a record-high of 15 per cent in 2015, foreign direct investment [FDI] inflows are seen to rise even further as the new administration addresses macroeconomic bottlenecks through its agenda,” said the company, which is an affiliate of the international property group Savills.
“The economic agenda for the country prioritises countryside development, infrastructure and agriculture growth, and increased government spending,” said Michael McCullough, the co-founder and managing director of KMC Savills. “Pair this with the administration’s goal of positioning the Philippines as one of the top three destinations in South East Asia for FDI inflows by 2022, and we see a very positive outlook for the real estate industry.”
Among the new administration’s plans is the lifting of foreign ownership rules from 40 to 70 per cent, while also hiking limits on land lease from 25 to 40 years. With Asean integration offering the country participation in global production networks, relaxation of foreign ownership restrictions will appeal to investors who look at the global market for goods and services, said KMC Savills head of research, Antton Nordberg.
“The Philippines has a strategic location, a large and fast-growing market, and knowledge of English. Growth rates in the industrial segment could even double in the next years,” he said.
That is helping to spur growth in the real estate sector.
A report by Ken Research said the Philippine property market is driven by rapid urbanisation, increasing employment by the BPO (business process outsourcing) sector, disposable income, surging OFW (overseas Filipino workers) remittances and growing real estate investment. And the increase in personal disposable income of consumers as well as growth in commercial and residential projects have created rising demand for property in the Philippines.
KMC Savills said the government’s economic growth plans will also have a positive impact on the real estate industry, continuing the boom over the next six years.
“The property sector is continuing its growth momentum,” said Mr McCullough.
chnelson@thenational.ae
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