IATokens
IATokens
Dec 3, 2019 · 2 min read

ISSUES HINDERING THE GROWTH OF THE PHILIPPINES PROPERTY MARKET

At the start of the year, it was forecasted that the Philippines property market will remain resilient and maintain its growth, saying that flexibility will be the name of the game due to strong demand and evolving preference of the tenants.

However, there are still looming issues and challenges that threaten to hamper the industry’s development as time goes by, which can be prevented by series of solutions. Some of the problems are:

  1. Rising interest rates. At the first quarter of this year, the prices of the residential properties in the Philippines experienced a slight correction due to the increase of the bank interest rates. The rising interest rates could dampen the impact of low to mid-income residential demand. According to Colliers, there is a slowdown in the condominium launching as it is surrounded by the increase.
  2. Construction delay. There is an expected increase in infrastructure spending of 7.3 percent of the country’s gross domestic product in 2020. However, due to the implementation of various public projects and the acute shortage of skilled workers who will work upon it, the private construction will be expecting some delays.
  3. Implementation of the tax reform program. The first package of the program had a negative impact already in the business field. As for the Philippine property market along with its second package of implementation, it could have an effect since it reduces the corporate income tax rates and rationalize tax and non-tax perks granted to foreign investors.
  4. Increased borrowing costs. Due to inflation, outstanding loans already granted by foreign currency deposit units of banks fell to $16.1 billion at the end of September, which is already $419 million higher compared to the end of June. It curtails consumer spending that accounts for 60% of the country’s economy.

Most market watchers believe that the tightening of monetary policy, which increases liquidity to create economic growth, could dampen the property stocks. Emerging hotspots in the Philippines have significant contribution that will help to drive up the Philippine real estate sector.

Even with some issues hindering the growth of the Philippines property market, it will still remain resilient for the next few years since there are more and more demand for properties. Transaction values of condominium prices in Metro Manila will continue to be driven by demand from mainland China investors, and a boom in warehousing demand in the logistics market from online retailers will be experienced.

IATokens

Written by

IATokens

The IA Tokens concept aims to revolutionize the real estate industry using Blockchain technology through the development of the IAT Platform.

IATokens

Written by

IATokens

The IA Tokens concept aims to revolutionize the real estate industry using Blockchain technology through the development of the IAT Platform.

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