In spite of the plunge in the rate of monthly remittances, Overseas Filipino Workers (OFWs) are expected to turn their eye upon acquiring new homes this Christmas.
The holiday season has, historically, brought with it a surge in real estate purchases, to take the word of property analysts. Bolstered by Christmas bonuses, OFWs returning home for Christmas look to acquiring residential property for themselves or their loved ones.
Ateneo program director for real estate and adviser for Wong+Bernstein Philippines, Enrique Soriano, issues that “cyclical fluctuations” occur in buying residential property.
“The purchasing pattern slows mid-year, as priority payments such as education and repairs take center stage,” reports Soriano. “The cycle then accelerates toward the year-end when overseas money meant for real estate purchase finds its way into the system.”
Real estate advisory firm CBRE Philippines echoes the findings.
“Common among these [OFWs] is the availability of their extra spending cash during this time of the year, some of which is set aside for the downpayment or reservation for a residential unit,” reports the firm.
Referring to accounts of some sales associates among property developers, CBRE adds that “there have been some stories wherein the monthly quotas of these sales associates were met in a single day during the holiday season.”
To developers and sellers, it’s good news amid a global financial crisis that has cut back the inflow of OFW money, according to Soriano.
“The average annual growth of remittances was only 6.9 percent from 2009 to 2013, compared to 16.8 percent annually from 2004 to 2009,” says Soriano. “Based on our monitoring, and validated by World Bank, the slowdown in remittances is primarily due to most OFWs having owned homes already, political uncertainties in host countries, and the growth slowdown in advanced economies.”
Soriano cites that “OFWs account for a third of residential purchases, effectively making the Philippines a remittance economy.”