EXPERTS’ 2013 FORECAST
Bullish PH economy to rouse real estate industry
By Tessa R. Salazar
Philippine Daily Inquirer
What’s in store for the country’s property
industry this year?
Going by the fearless forecast of five
property analysts, the outlook for 2013 is rosy.
Julius Guevara, associate director for
advisory services and head of consultancy and research of Colliers
International, said that in general, “the bullish performance of the economy is
seen to continue” in 2013. He said 2012 “proved to be a very good year for the
Philippine economy and specifically for real estate.” He continued that “an
end-of-year GDP (gross domestic product) growth rate between 6 and 7 percent has
been forecast by various analysts, and we saw the stock market hit all-time
highs during the past few months.”
Guevara added, “the residential
condominium market has also exceeded historical sales levels this year, as low
interest rates and record overseas remittances continue to fuel the housing
boom.”
Colliers International recently released
10 forecast statements on the economy and property sectors for 2013—a collection
of insights from various industry experts and Colliers.
“Similarly, the business process
outsourcing (BPO) industry continued to drive the office property sector, and
current vacancy rates in the major CBDs are in low single digits. The retail
sector has also done tremendously well; occupancy rates in regional and
superregional malls in Metro Manila are in the 90s. All in all, 2012 exceeded
most of our expectations,” Guevara added.
Best
real estate market
Rick Santos, CBRE founder and chair,
noted: “We are now experiencing the best real estate market in the Philippines
in the last 20 years. The Philippine real estate sector will have bright
prospects in 2013. We see sustained growth in the BPO/office, residential,
gaming and leisure sectors.”
Enrique Soriano, Ateneo program director
for real estate and senior adviser for Wong+Bernstein Business Advisory, said:
“Five years after the financial crisis triggered by a housing bubble, the global
economy is convalescing. The Philippine economy is poised to move up. Real
estate markets in all segments will grow. Some developers will fail and others
will do better because they have a strategy and they have found exactly the
right position.”
Claro dG. Cordero Jr., Jones Lang
LaSalle’s head for research, consulting and valuation, said an estimated 11,200
units is expected to be completed within 2013 for the residential segment. He
also explained that, though “the residential demand will stay strong across all
subsegments, there are also various externalities which may challenge the growth
of demand over the near- to medium-term.”
The first indicator cited by Colliers
showed the Philippine economy would grow by around 6 percent in 2013. The
forecast was made by Japanese financial services group Nomura and the World
Bank.
The World Bank raised its forecast for the Philippine GDP in 2013 to 6.2
percent, up from 5 percent. Nomura also raised its forecast for the GDP to 6.6
percent in 2013. “Growth is expected to tick even higher in 2013 because of the
impact of the elections, fiscal improvement and governance reforms in private
investments,” Nomura said.
Karlo Pobre, Colliers International’s
analyst for research and advisory services, explained that the recent growth in
GDP indicates that economic activities in the country have further expanded.
“The higher the GDP is, the more
attractive we become, specifically to foreign investors. Investment
opportunities should reflect on the property industry, considering the recent
developments in the market. This should preferably materialize in the office and
industrial sectors,” he said.
Sector contribution
Pobre added that currently the
construction sector contributes roughly about 8 to 9 percent of the GDP, while
real estate services is at 11 percent.
Soriano said: “the long anticipated growth
trajectory will happen this year; something that we have not felt for a long
time. We have had growth spurts in the past years but never a real, sustained
momentum. This time it’s for real. Our economic fundamentals are getting better.
The housing and construction market has assumed the lead role in this
trajectory, domestic demand is growing, PPP (public-private partnership)
infrastructure will continue its aggressive pace and the midyear local elections
will boost spending.
“Overseas remittance will grow as the US
economy continues to improve, albeit at an annualized rate of 1 percent and
Europe’s crisis is apparently showing some signs of remission. With this I
expect the economy to pick up steam and grow to 6.8 percent.”
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