Positive Effects of Sustained Philippine Economic Gains on Property Investors

The Philippine economy expanded by 7.6% in 2022, the highest rate of expansion in more than 40 years and far over the government's objective of 6.5% to 7.5%. According to Colliers Research, this is encouraging news for the real estate market, which in past decades has followed the boom-and-bust pattern of the national economy.

As a matter of fact, they say that the pre-selling and secondary housing markets in Metro Manila are expected to continue to recover thanks to this economic recovery, which should lead to a net increase in office space occupancy in 2023.

In addition, increased industrial space utilization throughout the country is likely to arise from the government's proactive approach to luring manufacturing investments. When the economy expands due to rising consumer spending, business in the retail and lodging industries should improve.

With this, researchers said that developers should prioritize constructing in high-potential development locations outside of Metro Manila if they want to capitalize on the continued economic expansion. When manufacturing investments pledged with investment promotions agencies (IPA) fill available space, developers of industrial parks and amenities should be ready for increased take-up.

Why Sustained Philippine Economic Growth is a Golden Opportunity for Investors?

One popular investment strategy was purchasing property in the Philippines. However, serious concerns were raised regarding the long-term viability of current real estate prices. If you are planning to put your money in the real estate market and take advantage of the current country's economic output, here are the reasons why this year is a great period for property investments.

1. A steady, long-term income

One strategy to increase your regular income is to invest in real estate. You may make money as a landlord whether you invest in a commercial or a residential house and lot in the Philippines The rent payments you get on a regular basis will subsequently become your source of income.

As an added bonus, real estate may be held for an extended period of time in the hopes of future growth as an investment. In fact, renting out your house is a great way to generate monthly income while you wait for the value of your investment to increase.

Moreover, with the gradual return of employees to their workplaces with outsourcing firms accounted to around 70% of total provincial deals, properties near commercial hubs will now again be in-demand since most of them prefer to live in an affordable house and lot near their office space.

As a property investor, this will give you more opportunities to earn passive income by renting out your private investment.

2. Potential for capital appreciation with the current Philippine economy

As the name implies, capital appreciation refers to the rise in the value of a home or investment property over time. The property owner may benefit from an increase in value in two ways: either by selling the property at a higher price or by charging monthly rent.

Rental revenue, earnings from property-dependent commercial activity, and appreciation are the three primary ways in which real estate investors produce a return on their investment. It's possible to make a profit when you sell real estate since its value rises on average over time. In addition, rents tend to increase with time, which might boost revenue.

Currently, inflation in the Philippines continues to rise. Inflation may increase the cost of getting a mortgage, which might be a deal breaker if you're looking to invest in real estate by purchasing a new home. Yet, this may result in a rise in property value for those who already own their homes. Last but not least, landlords have the option of raising the rent to cover rising costs.

3. Significant diversification benefits

When it comes to investing, diversification is essential since it lowers portfolio volatility and loss risk over the long term. Maybe the most significant approach to achieving your long-term financial objectives while limiting risk is to have a varied investment portfolio that provides greater risk-adjusted returns than a non-diversified portfolio over time. This is important, especially in the current status of the country's economy.

Because of its low connection with traditional stock investments, real estate offers investors a great way to diversify their portfolios. In addition, real estate assets may be diversified in a number of different ways, including by industry, location, and investment strategy.

Investing in an affordable house and lot for sale near commercial hubs like Lumina Homes residential properties give you this kind of benefits and passive income through rents.

4. High demand for lodging near local tourist attractions

With the Philippine economy already opening its doors to tourists and other foreign investors, the retail and hotel demand in various parts of the country also increases. As a matter of fact, more international tourists and persistent expansion of the domestic staycation industry are expected to drive in Metro Manila with a project average hotel occupancy beyond 60% by 2023, as predicted by Colliers.

Also, it is said that the pre-selling market rebounded this year. The Department of Tourism has even raised its forecast for the number of international visitors to reach 4.8 million by 2023.

Getting an investment near famous tourist attractions can help you to take advantage of this revenge travel across the Philippines. And the good news is, you don't have to invest in high-priced secondary residential markets since there are now affordable homes available in the property market.

You can check out Lumina Homes with our over 50 communities nationwide that are located in the famous travel spots on the types of holidays in the Philippines and enjoy famous Filipino snacks in various provinces.

5. Optimistic developments and innovations by the national government

To continue the momentum of the public infrastructure boom begun by the previous administration's Build, Build, Build program, the Build, Better, More (BBM) initiative has allocated Php 1.3 trillion in the National Budget.

Priorities for infrastructure investment include increasing access to basic services, public transit, boosting industrial links, extending physical and digital connections, providing cheap and secure energy, and building flood protection infrastructure for low-income populations.

Current physical, social, and digital infrastructure developments are attracting manufacturing investments committed with investment promotions throughout the world, leading to an economic expansion outside Metro Manila and a higher demand of property investments. This also expects foreign arrivals as well as foreign direct investment to increase in key growth areas.

Moreover, President Marcos Jr.'s administration is committed to sustainability, and in light of the rising demand for green investments, the government is preparing a series of infrastructure investment possibilities that meet the criteria of green investments as defined worldwide.

The Filipino real estate market is on the verge of a turnaround, has turned a corner, and can now see the proverbial light at the end of the tunnel. All signs point to a dramatic recovery in the Philippine real estate market after two years of decline.

So make sure to take actions now and grab this chance to start your lucrative real estate investment in an affordable price with Lumina Homes!