Monday, December 1, 2014

“No definitive evidence” of real estate bubble, say experts

(Photo: Wikimedia Commons)

Auditing and tax advisory firm Punongbayan and Araullo (P&A) recently held a forum with experts, developers and consultancy agencies in the real estate industry. 

Based on research and market insight, experts reached a mutual conclusion: to date, there is “no definitive evidence” of an impending bubble in the real estate market. Professionals referred to favorable economic conditions, strong demand, and growth in the number of construction projects.

P&A disclosed that the second quarter of 2014 saw a total of 32,728 construction projects - up by 11.2 percent from the second quarter of 2013. The cost of the projects also increased from P66.4 billion to P69.9 billion during the same time period.

Edgar Saavedra, Megawide president, credited the booming industry to the backlog of housing demand from buyers and renters, as well as to the rise of Business Process Outsourcing (BPO) industries in the country, a phenomenon that fed the demand for office and retail units.

Jones Lang Lasalle (JLL) Philippines, however, cited that the real estate industry “should not rest on its laurels.” Chief operating officer Lindsay Orr stated that while the Philippines has moved forward in real estate and construction in the ASEAN region, countries like Vietnam have also become more competitive. 

The government should also see to improving the transactional processes of real estate development and investment in the country, according to Francesca Landberg of Grant Thorton Global Leader. 

“True, there’s a lot of red tape here in the country as you go from one local government unit to another,” issued Landberg, “but all this can be addressed through three factors: willingness of government to do business by making the rules more transparent; use of technology as mechanism to speed up transactions; and willingness of the private sector to drive change and be passionate enough to push government to reduce the 18 steps to just one step.”



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