REAL Estate in Cebu to See Continued Growth in 2012

REAL estate players see continued growth in the industry with the government’s Public-Private-Partnership projects taking off this year.

Filinvest Land Inc. (FLI) AVP area sales head Boler Binamira Jr. said the implementation of the PPP projects will open more business and job opportunities for the sector.

New SM Mega Mall Cebu

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“2012 is another year to reckon with the government spending on infrastructure. This is another indicator for a continued upward growth in real estate,” Binamira said during the Real Estate Economic Forum organized by Realty Options Inc. last Saturday.

He said industry analysts predict a continued growth in the sector over the next 13 years. Although, the projection is a “conservative analysis,” Binamira said it is based on the demand “of the whole spectrum of the industry.”

Economic conditions

The Department of Budget and Management allocated P19.6 billion for Aquino’s PPP programs this year for road, airport and transport developments in Cebu.

In his presentation, Binamira noted that the improving fiscal and economic conditions, rapid increase of dollar remittances and sustained growth of the information
technology (IT) service are among the reasons national players in the sector, such as FLI, Ayala Land, and SM Development Corp. are investing in the real estate industry.

In terms of remittances, Binamira said 30 percent of the total overseas remittances goes to the real estate industry or approximately P600 billion in investments per year.

“This is why (developers) are racing against time to get a chunk of this big market,” he said.

The Bangko Sentral ng Pilipinas recorded $18.8 billion in overseas remittances in 2011, excluding the money sent home through informal channels.

Binamira said education and home acquisition are the top two priorities of overseas Filipino workers (OFWs) when it comes to remittance spending.

He said the growing middle class market is another factor that also drives developers to continue building homes. Binamira cited the growing number of OFWs belonging to the higher income brackets.

“Aside from the domestic helpers, the country also sends a lot of nurses, IT professionals, architects and engineers into the different parts of the world,” he said.

SRP Cebu South Road Properties

He said this also explains the sustained growth of the remittances despite conflicts in other countries.

The optimism in the real estate industry is also because of the huge housing backlog. The Housing and Urban Development Coordinating Council recorded a 4.2 million
shortfall in housing last year.

Housing boom

“If you were to spread the housing backlog, then we see a housing boom for the next five or so years on top of the new demand every year,” Binamira said.

He said much of the demand is for affordable, socialized and middle-income housing.

“We have around 70 percent target market now. This figure will also explain why national players have diversified their housing products,” he said.

REAL Estate in Cebu is to See Continued Growth in 2012!

Binamira said the South Road Property (SRP) development is an important driver of real estate growth in Cebu.

“The SRP development is an important indicator that will propel growth of gross domestic product, migration and employment. It will help catalyze the growth in Cebu, similar to Macau and Singapore,” Binamira said.

He said there were 73 high-rise buildings in Cebu as of last July. Of the number, 55 are already completed while 18 are still under construction.

Cebu will have 88 high-rise buildings by 2015, he said. The number does not include the 11 high-rise buildings to be put up in Mactan Island.

Published in the Sun.Star Cebu newspaper on February 21, 2012

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