Real estate boom benefits CV construction industry

CEBU, Philippines - The upbeat real estate industry in Central Visayas, specifically in Cebu, has benefited the construction industry.

A report from the National Statistics Office (NSO) revealed more new projects were given building permits in 2012 compared to the preceding year.

The optimism in the sector was not only felt in the province but also trickled down to the neighboring provinces in the region, as majority registered a higher number of new projects compared to the previous year.

Negros Oriental recorded the largest number of new additions to construction projects with 277 new buildings being built during the year. This could be partly due to numerous reconstruction works being implemented during the year following the devastation brought about by two major disasters in the province.

Cebu, on the other hand, recorded the second largest net addition to new projects with 153. But the province of Bohol saw a drop in the number of new construction projects registered in 2012.

The NSO data further showed that 87 percent of the new construction projects of the private sector in 2012 were for residential use. This was supported by data from the Board of Investments (BOI) that indicate that 13 out of the 24 projects that were registered with the BOI in 2012 were into mass housing and hotel construction.

The estimated cost of the 13 projects totaled P4.3 billion. This accounted for 10 percent of the total investments registered with the BOI in 2012.

In terms of value of the projects, commercial projects dominate the cost structure with the sector accounting for 51 percent of the total value of the new construction projects in 2012.

The commercial projects included BPO-ready buildings, malls and hotels. Among the bigger commercial projects that were completed and started operation in 2012 were the eBloc Tower2 and the Aegis People Support Green Building, both located in the Asiatown IT Park in Cebu, the Gaisano Mall in Guadalupe, Go Hotel in Dumaguete City, and the Bellevue Resort in Panglao Bohol.

 The upbeat construction sector clearly benefited from the real estate sector boom as more activities in the area were reported in 2012.

In Cebu alone, the real estate sector saw a revenue growth rate of 18.8 percent in the third quarter of 2012.

The real estate market was dominated by residential properties. Data from the Housing and Land Use Regulatory Board (HLURB) showed that in 2012, 14 residential condominium projects involving 5,212 units valued at P5.17 billion were issued licenses to sell.

All condominium projects are located in Cebu.

The market for residential condominium is targeted to expand further in the next few years as an additional 100 condominium buildings are projected to be completed by 2015 and another 170 to 200 buildings are expected to be finished by 2017.

In the case of the open market residential subdivisions, HLURB recorded 22 projects that were put on the block in 2012 costing P2.6 billion. Of the 22 projects, 15 are located in Cebu while the rest are found in the provinces of Negros Oriental and Bohol.

Heightened demand for real estate properties in the region attracted new players in the sector. The new real estate developers in the region included Grand Land, Inc., Gold Peach Properties, Apple One Properties, and Worldwide Central Properties.

According to the report, the growth of the region's real estate sector as well as the construction sector was fueled by the expansion of activities in the region's leading industries, namely, BPO/IT, retail trade and tourism.

 The real estate and construction industries also benefited from the steady demand for real property from OFWs, who are starting to consider real properties as good investments for their hard-earned money.

Meanwhile, liquidity in the market propped up by available credit and financing support from the banking sector also helped foster growth in the region's construction and real estate sectors. Private developers partnering with government agencies such as Home Development Mutual Fund (HDMF) or Pag-IBIG Fund further boosted demand for real estate properties, particularly for affordable housing units.

 The move by Pag-IBIG to double its loanable amount from P3 million to P6 million and to lower its monthly interest rates from 10.0 percent to 7.98 percent also greatly helped develop the housing sector. /JOB (FREEMAN)