Demand for property to remain strong – CBRE

MANILA, Philippines - Demand for office spaces and residential properties is expected to remain strong next year as business process outsourcing (BPO) firms and other businesses look to expand, and individuals plan to purchase property amid favorable economic conditions, real estate advisory firm CBRE Philippines said.

CBRE chairman and founder Rick Santos said in a press briefing yesterday that the Philippine real estate sector is expected to sustain its growth next year with demand from BPOs and for residential properties seen to remain strong.

“The Philippine real estate sector will have bright prospects in 2013,” he said.

He said the growth of the real estate sector is expected to be sustained as the BPO sector, which is experiencing growth as the top provider of voice operations and second in non-voice, still has room to expand in other areas such as software development, information technology and engineering services, as well as healthcare.

He said the growth of the BPO sector is fuelled by companies expanding given the favorable environment for business in the country.

“The Philippine BPO sector will continue to thrive in the next few years. The country provides a conducive environment for foreign investors, an excellent pool and low cost skilled labor, outstanding customer service, a quality destination, one of the cheapest rental rates and highest yields in Asia,” he said.

Santos said that apart from demand for office space from BPOs, demand from returning US and European multinational companies in the country is also seen to support the sustained growth of the real estate market.

Joey Radovan, CBRE vice chairman and head of global corporate services, added that even as there is strong demand for office spaces, supply is sufficient to meet the need.

“Supply is meeting demand and I think that will continue in 2013,” he said.

Santos said increased demand for residential properties is likewise seen to support sustained growth of the real estate market.

He said demand for residential properties is seen to continue to be strong given low interest rates and financing schemes available for home ownership today.

Interest rates range from five percent to 11 percent for short or long-term payment schemes.

“This has opened the opportunity for more Filipinos to become owners rather than renters,” Santos said.

Victor Asuncion, CBRE executive director for global research and consultancy, shared the same view as he cited low borrowing rates are making it more affordable to own a house now.

“Because of liquidity, a lot are encouraged to buy real property,” he said.

Santos also said that amid the central bank’s move to tighten rules in measuring banks’ exposure to the real estate sector, there is no need to worry and there is no property bubble seen.

“I don’t think there is a bubble but just the start of sustained growth,” he said.