MANILA, Philippines - Century Properties Group Inc. said while the rate of home ownership in the country remains low, a booming local economy is fueling demand and creating continued stability in the housing market.
Marco Antonio, co-chief operating officer and managing director at Century Properties, said strong and sustained sales of condominium units over the past two years are indicative of a continuously resilient real estate market, fueled largely by legitimate end user demand.
“Whereas other countries experienced a property glut, we are confident that the Philippine property market will remain healthy. Residential unit purchases here are non-speculative because majority of the buyers are end users. Compared to other Asian countries like Singapore or Taiwan, the Philippines still has low homeownership rates, hence the real demand,” Antonio said.
Citing a report by investment banking group Credit Lyonnais Securities Asia, Antonio said the Philippines still has a home ownership rate of below 60 percent.
Property consultant CBRE Philippines, meanwhile, said the country is “going through a democratization of the housing industry – from a nation of renters to that of a nation of owners.”
CBRE said the low interest rate environment and affordable financing schemes have made it possible for many Filipinos to own a home.
“More Filipinos are experiencing financial independence and they are more attracted to the proposition of paying for an amortization of P6,000 to P12,000 a month, rather than spending the same amount to rent out a place,” Antonio pointed out.
In the Philippines, where most residential projects are offered at lower pre-selling prices, the standard downpayment of 20 to 30 percent of a property’s total contract price can be stretched over the construction period. The balance upon turnover can be settled through a housing loan, which is still affordable as the banking industry’s interest rates remain at their lowest at five to eight percent, and loan takeouts can be payable over a period of 20 years.
Antonio said the housing boom is also fueled by the steady growth of remittances from overseas Filipinos.
“This is one of the strengths of the Philippine property industry. The demand is driven by our 11-million strong Filipino expatriates, coupled by a growing local market with increased purchasing power because of favorable economic conditions,” Antonio said.