The Philippine real estate industry has been a significant contributor to the country’s economy over the years. As one of the fastest-growing industries in the Philippines, the real estate industry has significantly impacted the local economy.
Residential real estates, like housing units, and commercial real estate properties, like office buildings for commercial spaces, have a big impact on a country, especially after the pandemic happens. This industry holds the key drivers for the Philippines and other countries to attain economic recovery.
Philippine Real Estate Market and the Local Economy
Philippine real estate is a dynamic and rapidly expanding real estate sector. According to data from the Philippine Statistics Authority (PSA), the real estate industry in the Philippines accounted for 13.1% of the country’s Gross Domestic Product (GDP) in 2019. This figure shows the significant contribution of the industry to the country’s economy.
How does real estate affect the local economy?
One of the primary ways in which the real estate industry contributes to the local economy is through job creation. Real estate developers provide employment opportunities for a wide range of professionals, including architects, engineers, real estate agents, and construction workers, through building residential units, office space, condominium units, and socialized housing. These retail spaces and residential properties are in strong demand again because many employers are now in a work on site set up. Thus, real estate developers do is a big tool to face the economic challenges brought on by the pandemic.
The Philippine Real Estate Industry
The real estate industry in the Philippines also contributes to the growth of the country’s construction sector. Residential real estate and commercial real estate becomes the primary vehicles for the real estate industry to flourish. The demand for housing and commercial properties has led to an increase in construction activities, which has created more job opportunities and boosted economic growth. Real estate investment also becomes prevalent as people become more financially informed on the gains of investing in real estate properties.
The industry of real estate also has a multiplier effect on the local economy. The industry’s growth and development led to increased demand for goods and services such as building materials, furnishings, and household appliances, among others. These, in turn, create more job opportunities and generate additional revenue for the local economy.
Foreign Investors and the Philippine Economy
Foreign investors can have a positive impact on the local economy in several ways. Firstly, they can bring in foreign direct investments (FDI), which can help boost the country’s balance of payments and increase its economic growth. This can help stabilize the economy including the industry of real estate.
Moreover, the Philippines real estate industry also contributes significantly to the country’s foreign direct investment (FDI). The Philippines has been attracting significant FDI in the real estate industry due to its attractive investment environment and robust economic growth. These investments have played a crucial role in the development of the industry and the country’s overall economy.
Real Estate Sector and Overseas Filipino workers
The real estate sector in the Philippines has a significant impact on the local economy. Its contributions through job creation, foreign direct investments, and the multiplier effect on the economy have been vital to the country’s economic growth and development. As the industry continues to expand, it is poised to play an even more significant role in the country’s economy, making it an essential sector to watch out for in the years to come. Office spaces, condo market, housing market, housing units and are becoming more famous even to the growing middle class population.
OFWs contributions to real estate
Overseas Filipino Workers have been driving demand for real estate properties in the country, and this has led to significant growth in the industry. One of the ways that OFWs help real estate is through remittances. Many OFWs send money back home to their families, and some of this money is used to invest in real estate properties. This has led to an increase in demand for residential properties, especially in urban areas where many OFWs live and work.
It is reported that there is an increase of 2.3 percent equating to $8.65 billion in the first quarter from $8.45 billion in the same quarter last year.
Another way that OFWs help the Philippine real estate industry is through their desire to own property in their home country for their Filipino families. High class villages, and condo units, in Ayala land, Metro Manila, or the National Capital Region entice overseas Filipino workers to have their property investment. Many OFWs see owning property as a way to secure their future and provide stability for their families. This has led to an increase in demand for both residential and commercial properties, as many OFWs are looking to invest in properties that can generate rental income or serve as a source of passive income in the future.
Property Market
The property market is a crucial sector of the economy, and it is closely tied to the demand for residential units or residential real estate. Real estate prices are one of the key indicators of the health of the property market. Real house prices are adjusted for inflation and reflect the true value of a property whether in Metro Manila or other parts of the Philippines. Real estate prices tend to fluctuate over time due to various economic factors, such as changes in interest rates, employment rates, property values, and the economy.
Domestic demand refers to the level of demand for goods and services within a country. In the context of the property market, domestic demand refers to the level of demand for housing by residents of a particular country. The level of domestic demand is affected by factors such as interest rates, income levels, and population growth. A high level of domestic demand for housing can lead to an increase in real estate prices, which can in turn attract more investment in the property market.
The property market is a complex and dynamic sector of the economy, and a wide range of factors influences it. Real house prices, residential units, and domestic demand are all crucial elements of the property market.
