Philippine property investment in 2022 comes with both potential and risk. The long-term prospects of the country’s real estate market remain strong with positive economic signs already being seen. For example, OFW remittances increased during most of last year. Many experts believe a full recovery is likely to happen once the COVID-19 pandemic passes.
Of course, when exactly that happens remains uncertain. The emergence of the Omicron variant derailed plans to reopen the country to tourists and could dampen prospects in the first quarter of the year. Prior to the most recent outbreak, economists at the Japan Center for Economic Research and Nikkei had set the Philippines 2022 GDP growth forecast at 7.1 percent.
Another thing to keep an eye on is the presidential election set for April. This will have an impact on both the economy and real estate market moving forward. With that in mind, here are four things to know about Philippine property investment in 2022.
What you should know about Philippine property investment in 2022
Waiting on the recovery
Philippine property investment in 2022 is directly connected to a greater real estate market recovery which may or may not begin in earnest during the next 12 months. Those searching for positive news will look to predictions from the Philippines central bank, BSP, as proof that a turnaround is on the cards.
“The BSP anticipates that activity in the real estate market will recover in line with a rebound in overall economic growth in 2022,” BSP Governor Benjamin Diokno was quoted as saying by Philstar Global. “Real estate demand slipped due to the uncertainties brought about by the global health crisis as capital values for office and residential units in the country’s major commercial and business districts slumped in 2020.”
Meanwhile, property prices in Cebu began to increase last year and that trend is expected to continue in 2022. Don’t get too excited though. It may take a little longer for the market to recover due to two factors. Firstly, its reliance on overseas investment means travel restrictions will need to be removed in order for activity to pick up. Secondly, a lack of new launches, especially in Metro Manila, could limit interest in the short term.
Return to the office
Companies resuming full, in-office operations would be a boost to Philippine property investment in 2022. The business process outsourcing (BPO) sector would be a key driver should there be an uptick in demand. More office space uptake creates more hiring which has historically boosted interest for residential real estate nearby.
Suburban growth
The biggest change when it comes to Philippine property investment in 2022 is happening in the suburbs. People continue to swap CBD condos for housing outside the city. This is especially true in Metro Manila where township developments to the north and south of the National Capital Region have lured people away from metropolitan areas.
Provinces around NCR are benefiting from the completion of major infrastructure projects, such as the NLEX–SLEX Connector and the Central Luzon Link Expressway among others. If the “New Normal” and work from home policies become the norm, it could dampen condo investment prospects in certain locations.
Davao leading the way
The Davao economy and real estate market have outperformed the rest of the country over the past two years. Buoyed by infrastructure investment along with an influx of national and international companies, the region has become a destination.
“In our view, the (Davao) economy is ripe for further expansion and development,” Joey Roi Bondoc, Senior Research Manager at Colliers, said. “With a thriving real estate market, an abundant pool of quality labor, and a competitive business environment, Davao is set to attract future property investors to operate in the area.”
More talent and a continued increase in jobs would be a boon to condo investment in Davao. Many leading Philippine homebuilders have begun launching projects in the region which has elevated the local real estate market even further.