Economist warns Phl, Integration to boost real estate demand

CEBU, Philippines - Economist Cielito Habito cautions the Philippines to take extra measures in managing real estate growth as the opening of the ASEAN economy is seen to accelerate the demand in the industry.

Habito said the real estate industry is one of the sectors that will largely benefit from the integration as the increased economic energy will translate to real estate demand and rental rates are expected to move up dramatically.

This opportunity he said must be managed properly, and that development of real estate projects should be spread into underdeveloped areas or to emerging cities and provinces,

Cebu for instance is an attractive site for real estate market, and that, developers must consider to see opportunities in starting projects in other emerging cities to make them the "new growth posts."

This way, this will diffuse fears of excessive demand.

Meanwhile, real estate analyst Eric Soriano said that the 2015 ASEAN integration could either turn out good or bad to the country’s booming real estate sector depending on how the local players will be able to guard their turf with the entry of more ASEAN real estate professionals to take advantage of this flourishing business.

However, the country’s restrictive policies on foreign capitalists to own and operate a business in the country may protect local players, consumers on the other hand will not be able to enjoy the benefits of competition between developers.

This means that ownership restrictions could discourage real estate investors from ASEAN to pour in their money here and participate in the competition, which in turn will deny consumers the opportunity to have wider and better options.

Soriano added that while the integration will keep local developers on their “toes” to take advantage of the widening market base, the Philippines in general is not yet ready to face the competition battle that ASEAN integration will bring.

In general he said the Philippines may lose competitive advantage if it does bend its policies to conform with the changing requirement in the ASEAN integration regime. (FREEMAN)