All signs are pointing to a surging property market in the Philippines. The economy is growing at 7 per cent, its highest rate in 30 years, and remittances from more than 10 million overseas Filipinos is expected to increase 7 per cent this year, reported the Wall Street Journal.
While the price of luxury homes has only grown 3 per cent to date this year, the rents in these sites are already up more than 8 per cent, according to data from real estate firm CBRE.
Real estate developer Century Properties Group Inc. is enjoying the success of the expanding market. The Manila-based company currently has three projects in the works, including the Milano Residences in Makati, designed and branded by Versace Home, under the umbrella of the Italian fashion house. In April, only two months after its launch, the residences had already sold 54 per cent of its units.
“We have a growing middle class, and the first thing they buy is real estate. We’re very bullish on the sector. Our revenue in 2010 grew over 35 per cent,” said Robbie Antonio, managing director of Century Properties Group Inc.
Century has amassed a volume of close to US$1.45 billion of properties, most of which lies in the Philippines.
Antonio is confident the market in the Philippines will continue to grow. “I don’t think we’re in a bubble here, and if it did come to that, I think the central bank could cool it down,” Antonio told the Wall Street Journal.
With the rising cost of living, may have to adjust strategies to reflect these changes. “We see how inflation affects oil prices and that affects steel and concrete. We try to hedge. If we feel [prices will]shoot up, we try to buy more earlier on,” Antonio said.
“Inflation has more of an effect on our cost of purchasing because that’s a large component in our construction business. The exception is labour. What are you going to do? You need these people. You can’t hedge labour,” he explained.