The country’s residential real estate market has seen consistent growth in 1Q2019-2Q2019. The growth is thanks to strong consumer demand. This encouraged the development of more office and residential space around the country’s central business districts.
High Demand, Higher Supply
The Philippine Amusement and Gaming Corporation (PAGCOR) reported the consistent growth of the POGO industry in Metro Manila. Since the Chinese employees of POGO firms have long-term employment plans, their demand for housing has increased.
Leechiu Property Consultants (LPC) reports that since 2018, at least 12 units in each condominium are occupied by these foreign workers.
This high demand spurs developers like AboitizLand to answer the need. The company has entered a partnership with microstudio apartment developer, Point Blue.
POGO Effect
For the first time, the country sees simultaneous growth in commercial and residential real estate. POGO has given developers thousands of new residents, who have migrated to the country for their new jobs.
The influx has an immediate effect. Residential properties see a price drop of 5%-8%, while in Davao, vacancy rates drop to a low of 12%. Heretofore empty condominiums are filled with POGO workers.
It is quite possibly the first time we’ve had demand this consistent.
Developers are rushing to develop new spaces around the CBDs. Chinese workers currently occupy 30% of condominiums around the country, as reported by LPC.
Cambodia meanwhile has an opposite story, as authorities have banned online gaming in the country. This has rebounded negatively on Cambodia’s residential property market.
Khmer Times called this as the “Great Chinese Exodus.” Radio Free Asia (RFA) reported that there are at least 6,000 Chinese nationals that left Cambodia each day this last September.
Land prices in some places in Cambodia like Sihanoukville went from $200 to $3000 per square meter after the Chinese departed. Perhaps this fallback is temporary; the Kingdom banned online gaming to make the way for future quality investments.
Unlike Cambodia’s story, the Philippines’ first half was successful. But will we maintain this good streak until the end of the year? Will developers and real estate giants experience profitability and wealth this year as a result of POGO? Time will tell.
Stay updated in the country’s residential property market. Visit https://housinginteractive.com.ph/ for more!
