Reasons why invest in Real Estate in the Philippines
The Philippines is a rapidly developing country in Southeast Asia that has been attracting a lot of foreign investors in recent years. One of the sectors that have been gaining popularity among investors is real estate. Here are some compelling reasons why investing in real estate in the Philippines can be a smart move.
- Growing economy
The Philippines is one of the fastest-growing economies in the world, with a 6.4% GDP growth rate in 2019. This growth is fueled by the country’s increasing population and an expanding middle class, which is driving demand for real estate. As the economy continues to grow, property values are likely to increase, providing investors with a solid return on investment.
- Favorable demographics
The Philippines has a young and growing population, with a median age of 25.8 years. This demographic profile suggests that demand for housing will continue to increase as more people enter the workforce and start families. This means that there will always be a market for real estate, making it an attractive investment opportunity.
- Booming tourism industry
The Philippines is known for its beautiful beaches, tropical climate, and friendly people, making it a popular tourist destination. The tourism industry is one of the largest contributors to the country’s economy, with a record-breaking 8.2 million tourists in 2019. This growth in tourism has led to a demand for vacation rentals and hotel accommodations, making real estate investment in these areas highly profitable.
- Affordable prices
Compared to other countries in Southeast Asia, real estate prices in the Philippines are relatively affordable. This is due to several factors, including a lower cost of living and lower labor costs. As a result, foreign investors can buy property at a lower price point, making it an attractive investment option.
- Government support
The Philippine government has implemented several initiatives to attract foreign investors, including tax incentives and relaxed foreign ownership laws. These policies make it easier for foreign investors to purchase property in the Philippines, providing a boost to the real estate market.
According to data from the Bangko Sentral ng Pilipinas (BSP), real estate investment in the Philippines has been steadily increasing over the past 10 years. In 2010, the total amount of real estate loans granted by banks was PHP 378.7 billion. By 2020, this figure had increased to PHP 2.2 trillion, representing a compound annual growth rate of 20.4%.
The same BSP data also shows that residential real estate loans account for the largest share of real estate loans granted by banks, followed by commercial real estate loans. This indicates that there is a significant demand for housing in the Philippines, making real estate investment in this sector particularly attractive.
Moreover, the Philippine Statistics Authority (PSA) reported that the construction industry in the Philippines has been growing at an average annual rate of 9.5% over the past 10 years. This growth is expected to continue, with the government targeting an annual growth rate of 10% for the industry until 2022. This growth is driven by public and private construction projects, including the construction of residential and commercial buildings, roads, bridges, and other infrastructure projects.
These statistics suggest that real estate investment in the Philippines has been a lucrative opportunity over the past 10 years and is likely to continue to be so in the future.
In conclusion, investing in real estate in the Philippines can be a wise decision. With a growing economy, favorable demographics, a booming tourism industry, affordable prices, and government support, there are many reasons to consider investing in this market. However, as with any investment, it is important to do your due diligence and work with a reputable real estate agent to ensure a successful investment.