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Is Philippines property good for investment in 2019?

Before we discuss further, we need to understand the Philippines property market overview, the situation of Philippines property:

· Mostly freehold

· Nett floor area, no factoring like other Hong Kong or some other countries

· Fully furnished on turnover that may include lose furniture and electrical appliances

And there are two restrictions on foreign buyers:

· Foreigners cannot own a land, therefore landed properties like villas are not allowed to sell to foreigners

· Foreigners can only buy not more 40% unit of a project development only, another 60% are for Filipino buyers

The Philippines' GDP last year was $313.6 billion with a per capita GDP of nearly $3,000, whereas Thailand ($455.2 billion) and Vietnam ($223.9 billion). The Philippines' GDP growth, which is now more concerned, has remained above 6% in recent years with Durtete government, a figure that can be blown to "catch up with China" and so on.

Manila's current housing prices in 2019 are from ₱150k/sqm to ₱370k/sqm or even higher on some very luxury projects in Makati, BGC or MOA. Some may wonder why all of a sudden everyone is investing in Philippine property. The biggest advantages of investing in Philippines property are high leverage, low pre-investment and very high rental yield. The average rental yield in Metro Manila was recorded 7.5%!

Colliers believes that pre-sales properties in 2019 will still remain strong given the strong end-user demand. However, topping the 2018 sales figures might be a challenge given Colliers’ projected slowdown in launches due to the lack of available developable land in Metro Manila and the continued acceleration of land prices. This explains why there is a 9.2km shoreline land reclamation at Mall of Asia, Pasay.

So why does everyone choose Manila and Cebu property in the Philippines? Many Chinese companies, especially e-commerce and gambling companies, have outsourced operations to places like Metro Manila and Cebu. There’s been a continuous rise of Chinese investors in recent years, driving the demand for luxury property and increasing prices on both selling and renting.

First of all, you need to know about Manila, a city where most people invest in business districts, which accounts for about 15% of the entire city. There are a lot of high-end apartments, office buildings, large shopping malls, many overseas companies to the headquarters and BPO set up here, so there are many white-collars. It is close to China's first and second-tier cities, and of course, it is the most dynamic place in Manila.

"The outer suburbs are not advisable to invest because there really there has no clear development plan at least not in the near future. Besides, if there is a concentrated slum next to the project, don’t buy! Do not believe the property agent that may say "the slum will be demolished later", this kind of words is always a trick to you. Because the land in the Philippines is private, although people live in the broken place but there are property rights and voting rights, the local government is afraid to forcibly demolish them." says the co-founder of Homdax, a pre-sale property platform in South East Asia.

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