2015 is upon us. What does the forthcoming year herald for the property industry? According to experts, the market for real estate is poised for further growth, thanks to several key factors.
3. OFW remittances
OFW remittances increased by 6.1 percent year-on-year as of September 2014. Given this figure, remittances ought to reach $24 billion by year-end, according to Claro Cordero, head of research and consulting in Jones Lang LaSalle (JLL). source
In JLL's news briefing held in Makati, Cordero issued that "remittances are expected to grow at around 7 percent from 2014 to 2017."
Additionally, majority of the OFW population -- 90 percent, as per estimate -- weren't affected by the US recession, according to Boler Binamira, a consultant for business development and sales and marketing head of Paramount Property Ventures . Most OFWs are in the medical and professional fields; as such, remittances should remain stable, said Binamira. source
Furthermore, the Central Bank reported that 30 percent of OFW remittances are set aside as real estate investments. Property sellers and developers can expect these investments to start pouring in during Christmastime, a regular, yearly trend, as per the real estate advisory firm CBRE Philippines. source
“Common among [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,” stated the firm.
OFWs count as one of the largest markets for residential units. Additionally, OFWs fuel the retail industry with consumer spending made possible by robust remittances. With this upward trend, the residential and retail sectors are expected to experience continued growth.
OFWs aren’t the the only end-user segment that contributed to the bullish prospects of the property market. In the next part, find out how the growing middle class powered real estate demand, according to a recent report.