The Philippines is emerging as a new property hotspot for foreign investors. Demand for real estate in the country has risen 9 per cent in the last year, reveals new research by TheMoveChannel.com.
Its climb in popularity has taken place steadily throughout 2016, with the country appearing in the portal’s top 10 most sought-after destinations four times. The rise in interest is boosted by the country’s thriving economy: according to official figures, the Philippines had the second-fastest growing economy in the world in Q2 2016, growing by 7 per cent year-on-year, ahead of China (6.7 per cent) and behind India (7.1 per cent).
That economic growth, in turn, has been driven by the country’s real estate: in Q2 2016, enquiries for Philippine property on TheMoveChannel.com soared 367 per cent compared to the previous quarter.
Together, they share the same underlying positive fundamentals: a rapidly growing population, which is fuelling urbanisation, and booming international tourist appeal.
As a result, the mood is positive: Barcelona-based think tank FocusEconomics forecasts the rise will continue, with the economy set to increase by more than 6 per cent over the next two years, faster than 2015’s 5.8 per cent.
This month, S&P Global Ratings also announced that it will keep the Philippines’ credit rating a notch above investment grade with a “stable” outlook.
“We may raise the ratings if continued fiscal improvements under the new administration boost investment and economic growth prospects, or if improvements in the policy environment lead us to a better assessment of institutional and governance effectiveness,” S&P said.
“The Philippines’ ability to keep its credit rating well within the investment grade scale, which has transcended change in political leadership, is a testament that the country’s economic gains have been built from deeply rooted structural and sound policy reforms over the years,” commented Amando Tetangco Jr., governor of the Philippines’ central bank (Bangko Sentral ng Pilipinas).
Indeed, May 2016 saw the election of new President Rodrigo “Digong” Duterte, who pledged to clamp down on crime and corruption.
Since the election, the new administration has made it clear that it wants to boost Foreign Direct Investment in the Philippines, which the real estate world has welcomed.
Foreign ownership restrictions, for example, are expected to to be lifted. Foreigners still do not have the right to own land fully in the Philippines, although investors can own houses and buildings, while land can be leased by a foreigner or foreign institution on a long-term basis. Land can be owned by a corporation, providing that foreign equity in the corporation does not exceed 40 per cent – a cap that is now expected to be raised to 70 per cent.
Filipinos are optimistic about what that means for the property market: a survey of 1,000 UAE-based Filipino expats found that 90 per cent believe now is the time to invest in their home country’s real estate. 93 per cent of those polled by New Perspective Media (NPM), the organisers of the annual Philippine Property and Investment Exhibition, said that the investment environment is improving already.
On TheMoveChannel.com, one of the most sought-after Philippine opportunities is the new luxury resort, Portofino Ocean’s Edge, launched earlier this year on Carabao, the sister island to the popular Boracay.
The number of tourist that visit the pair is on the up, with Boracay seeing significant development in the last decade, with over 200 resorts, hotels, restaurants, bars and shops, mostly in the White Beach area.
The Portofino resort is built on hills 30 to 50 metres above sea level with panoramic views of the Sibuyan Sea – and like the Philippines, its international appeal has proven wide-reaching.
Ray Withers, the Chief Executive of global investment specialists Property Frontiers, which is acting as an agent for the resort, comments: “In the last couple of months we have launched a few really interesting international projects. Appetite has been very strong, and it is exciting to see that investor tastes are widening in step with the changing shape of the world economy.
“The Philippines has proved to be an excellent choice: the country has seen the fastest economic growth rate in the region, driven by infrastructure investment, tourism and a reduction in red tape, as well as capital growth in property close to 10 per cent per year.”
Withers particularly highlights “a lot of interest” from clients in Asia, such as China and South Korea, which also make up the bulk of foreign tourist arrivals to the islands.
“The combination of strong market fundamentals and beautiful views has been understandably irresistible to many investors,” he adds. “Emerging and international markets being our speciality and the area our client base knows best, we are feeling emboldened to continue expanding our horizons – and we hope to launch more projects like Ocean’s Edge in the near future.”
For more information on investing in the resort, click here.Google+