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PIA Press Release
2007/11/04

Feature: OFWs and migrants as drivers of real estate growth

By Minerva BC Newman

Cebu, Philippines (4 November) -- Migrants and Overseas Filipino Workers continue to fuel Cebu's real estate growth.

Estate developers in Cebu attested that buyers come in droves and the trend showed that many of them are migrants from other provinces in the Visayas and Mindanao areas.

According to Commonwealth (a real estate developer) most of their buyers come from the provinces who are usually attracted to Cebu's growth, job opportunities, good schools, modern hospitals and lifestyle, among others.

OFW buyers and those with foreign spouses account for around 45% and 30% of the real estate business respectively. The developers said that OFWs are used to their lifestyles and living standards abroad, hence they would like to live in an urbanized setting like Cebu.

Many developers like Commonwealth, Fil-invest and Crown estimated that buyers using foreign money about 70% of them come from the US and UK and some from other 20 countries. Many of the buyers are nurses and sea-based workers.

Buyers according to the developers come from all age groups; some are young and just starting their families; others are retirees who want to enjoy Cebu after so many years of being away from the country.

Many buy property for their parents and siblings and used them only during vacation. However, there are about 5% of subdivision property buyers for purely investment purposes only.

They do not actually use it and most of them buy lots from new undeveloped subdivisions. Their goal is to sell the property when the value appreciates because sometimes, the values can double in 3 years or so, Commonwealth said.

It can be recalled that in the late 1990s Cebu was literally envaded by big national real estate developers who had foreseen the growth potentials of the City.

Housing and Land Use Regulatory Board data showed that in 2005 alone, 72 subdivisions were issued licenses to sell and this projects cover the towns of Minglanilla in the south and Liloan in the north.

Crown Communities and Fil-invest are Manila-based developers that saw how their units were sold-out after a few years of their Cebu operations. They boast of local sales record that surpassed that of their Manila office.

Today, the prospects of the real estate industry developers agree look very bright, barring any financial crises. Fil-invest said the speed of which their units are selling is the reason for this positive outlook.

In 2006, developers said that the estimated housing backlog for Cebu was at 22,000 houses and growing. This is a demand that none of the present developers can singly or jointly fills.

The continuing growth of the real estate industry got a big boost when the government through its Housing and Urban Development Coordinating Council (HUDCC) wows to shorten the red tape in the industry.

The country's vice-president Noli de Castro, who is also the chairman of HUDCC, gave the assurance during the October 26 convention of the Chamber of Real Estate and Builders Association, Inc. in Cebu.

De Castro said that for the country to take the center stage of the robust growth of the real estate sector, there is a need to cut off the bureaucratic red tape and to set up a one-stop-shop that houses all shelter agencies that provides all the needed permits and documentary requirements making easier access for developers to continue with their projects with less hassles and headaches.

The Vice-President added that he will proposed for the deregulation of the real estate industry sector by minimizing redundant permit requirements.

Part of the deregulation clamor of the developers is for the national government to assist LGUs in providing the developers with attractive environment for business and investments.

The national president of CREBA, Pedro Tario said that De Castro's pronouncement was very timely, because the Philippines is now on a real estate "boom."

According to De Castro, the country's real estate industry is booming and as posted its highest growth record of 30.4% during the 2nd quarter of this year.

The government has already released some P4.4-billion for housing loans through the Pag-Ibig or other government financial institutions. "We have lowered the interest rates on housing loans at 6-7% for the P300,000 and 750,000 loans respectively.

De Castro was here in Cebu recently as keynote speaker of the 3-day convention of the Chamber of Real Estate and Builders Association (CREBA) at the Waterfront Hotel, Cebu City. (PIA-Cebu) [top]

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