MANILA, Philippines - The property market will continue to be driven by the expansion of the business process outsourcing (BPO) sector and the strong spending of overseas Filipino workers (OFWs) and the emerging middle class, according to an official of the Chamber of Real Estate and Builders’ Associations (CREBA).
In an address during CREBA’s launch of its 21st Annual National Convention held in Makati Thursday, its executive vice president Noel Cariño said the property sector has been enjoying a “prolific growth” in recent years, fueled by increased vertical developments in urban areas, particularly for affordable residential units.
“The Philippines’ tableau of global Filipinos continues to fuel a boom in the real estate market estimated close to 12 million or a 10th of the total Philippine population, the magnitude of their contribution has always been a major force in the national economy and property acquisition,” he said.
The country’s 12 million OFWs comprise roughly a 10th of the country’s population. Data from CREBA shows that since five years ago, some $5 billion of OFW remittances have been spent on property purchase and is expected to increase as remittance volume grows. In 2011, the Bangko Sentral placed cumulative OFW remittances at around $20 billion, a volume considered to be conservative because some 30 percent of remittances are coursed through other channels outside the banking system.
Property demand from OFW consumers has also changed from low cost housing to mid-range homes such as townhouses and condominium units priced between P3 to P7 million. This is because expatriates are now aware of the higher resale or lease value.
“The cityscape is enjoying a major facelift with new buildings featuring state-of-the-art construction and even great design. Vertical developments have emerged at the practical and value-oriented for urban dwellers,” said Cariño.
He said improved business confidence leading to more investments in tourism and the BPO sector would contribute to the growth of the property sector.
“The global community is, likewise, appreciating the best in all Filipino from business to architecture, to tourism, to BPO. And with this increasing spending power of the middle class, a strong and conservative banking sector, a stable home- buyers’ market that is free from speculators, which we experienced in 1997, plus billions in remittances from abroad, we see a lot of positive things in sight for the industry’s flourishing growth,” said Cariño.
CREBA is holding from Oct. 18 to 20, its 21st national convention in Puerto Prinsesa City. Cariño said that during the convention, industry players would identify strategies to sustain the uptrend in real estate growth, primarily in housing development.
“Building and construction has meant growth and that conveys progress, indicating an upsurge in economic activity. Domestic growth has always been good news for the country,” he said.
CREBA also is pushing for the passage of a bill creation of a Department of Housing and Urban Development (DHUD). The so-called DHUD bill, which has been pending in Congress for 20 years now, is sponsored in the Senate by Senator Ferdinand Marcos Jr, and in the House of Representatives by Rep. Rodolfo Valencia.
The DHUD bill aims to elevate the status of the Housing and Urban Development Council (HUDCC) into a full department which would have administrative and supervisory powers over key shelter agencies (KSAs) such as the National Housing Authority, Housing and Land Use Regulatory Board, Home Development Mutual Fund, Home Guaranty Corporation and the National Home Mortgage Finance Corporation.
The bill also provides veto powers to the housing secretary over all actions taken by the governing boards of KSAs. CREBA considers this as a “radical, albeit necessary” measure.
CREBA argues that the creation of a housing department would effectively address the housing backlog in the country because it would establish a permanent seed fund, balance land use, enhance securitization measures, and protect the property right of legitimate landowners.
CREBA said that to reduce the housing backlog and, at the same time serve the needs of the growing population, some 500,000 housing units need to be built per year.