Riding the property boom

With numerous real estate developments and expanding markets, the Philippine real estate industry rests comfortably on the crest of an industry boom.

Viewed as prime investments, big industry players like Ayala Land Inc., Robinson's Land Corp., Vista Land and Lifescapes Inc. and Megaworld Corp. are now joined by SM Development Corp., Eton Properties Philippines Inc. and DMCI Holdings, Inc.

"The demand for housing is on the rise and I do not foresee any downturn in the next 10 years," shares Bibcee de Guzman, Caloocan chapter president of  the Real Estate Brokers Association of the Philippines.  "The investment climate is good and nobody's scared to develop real estate projects.  When the construction stops, that is the time to worry."

The promising developments in the real estate industry provide enough reasons for buyers and investors to seriously look into the market.

Rising from the global financial crisis, the local real estate prices remain competitive.  The Ondoy tragedy dampened the market for some months but has been seen on the rebound lately.  Vibrant as it is, the industry even attracts foreign property investors and buyers.

Our banking system remains strong and liquid and these contributes to both investors and consumer confidence.  From 30-percent loan interest rate during the 1997 Asian financial crisis, banks now offer 10.75 percent to an even low interest rate of 8.50 percent.  For low-cost housing, Pag-Ibig Home Development Mutual Fund offers 6-percent interest on housing loans with payment terms extended up to 30 years.

Tourist arrivals are steadily rising and the figure easily translates to a surge in demand for hotels and condominiums.  In the first quarter of 2009, a total of 1.3 million tourists arrived in the country.  For the same quarter this year, tourist arrivals grew by 7.89 percent.  Foreigners are also taking advantage of the retirement packages and incentives for ownership as provided by law.

The Philippines, through the Philippine Retirement Authority, has been attracting foreign retirees to settle in the country. In fact, prospective investors are already eyeing to put up retirement villages in Pampanga, Zambales and Bataan.

Medical tourists, attracted by lower costs, quality services and tourist spots, add the numbers in the demand for accommodations.

The projections for offshoring and outsourcing businesses that require the availability office rentals and commercial office spaces remain optimistic.  Office rentals in Makati, Fort Bonifacio and Ortigas are highly-favored locations in the Metro.  

Migrant workers have great interest in Philippine properties because prices are more affordable than those overseas.

As a rule of thumb, it is always best to transact with certified real estate brokers and reputable real estate companies in the Philippines when considering acquisition of real properties.

To set higher standards for the industry, Republic Act 9646 was approved by former President Gloria Macapagal Arroyo last June 29, 2009.  Entitled as An Act Regulating the Practice of Real Estate Service in the Philippines, Creating for the purpose of a Professional Regulatory Board for Real Estate Service, Appropriating Funds Therefore and for other purposes, the law covers all industry players including investors, brokers, appraisers, city assessors and real estate consultants. 

Brokers are now bound by law to apply for their licenses, pay taxes and comply with industry regulations.  The implementing rules and guidelines were published last July 24 and fully implemented last August 9.

"We welcome this law because we are now considered as professionals.  With this law in place, we are protected from colorum agents that stripped us of sales opportunities in the same manner that buyers are protected from shady transactions," adds De Guzman.  "Real estate buyers lose huge amounts of money as they become victims of scams especially with the introduction of online selling.  But since we will now carry brokerage licenses, buyers can go to the Professional Regulation Commission for verification."

In the same manner, property titles can be checked for authenticity with the Register Deeds, Assessor's Office and the Land Registration Authority.  The LRA is now putting into motion its program of filing land titles in digital format to curb the proliferation of fake documents.  Land titles in digital format can already found in Quezon City, Cebu and Parañaque.

Real Estate Brokers Association of the Philippines is composed of more than 500 regular and associate members spread over 21 chapters in Metro Manila and the provinces. Under the leadership of national president Emily Quevedo-Duterte, the association  remains as the premiere real estate organization in the country aimed at professionalizing the real estate industry and raising the level of ethical standards of licensed real estate practitioners.

First posted on December 2, 2010.