Philippines property market: On a home run

Many Filipinos are roughing it out in Dubai, living in cramped flats and sharing accommodation, so that they can build their dream nests back home.

Demand from expatriates has been so encouraging that the first Philippine Property Show was held in Dubai in September.

Manila’s top five property developers booked about Dh48.50 million worth of properties from the UAE-based Filipinos in 2007, according to some estimates.

And according to the project director of the show Jovy Tuano, this very demand has also helped the property market in the Philippines weather the sub-prime crisis currently ravaging global markets.

In a country where one in three families live below the poverty line, saving and owning a house may be a luxury for the vast majority of its 90 million people. But not for eight million Filipino expatriates, about a million of whom are in the Middle East.

Lowell Villenas, 35, an aircraft technician with Emirates, and his wife Sheila recently gave the down payment for a 2.4-million-peso (Dh186,355) two-bedroom flat in the upscale mid-rise apartment Chateau - a 15 minute drive by car from Manila’s financial district of Makati. It will take Villenas and Sheila Dh1, 940 in monthly amortisation to be paid for five years to fully own the property, but they’re moving in soon.

“We can’t wait to spend Christmas in our new home,” said Sheila, who also works in Dubai.

A 20-per cent down payment, usually payable in 18 to 24 months, secures a property.

Like Villenas, several of his friends who live in shared apartments in Dubai, have also bought a piece of the 20-billion-peso (Dh1.54 billion) project of SM Development Corp, the name behind Asia’s biggest malls.

Aircraft mechanic Von Bianzon, 34, one of Emirates airline’s estimated 7,000 Filipino employees, is one who has recently bought a two-bedroom unit in Chateau.
Bianzon, a father of four said: “It’s a form of forced savings for me.”

Gina Salazar, HR manager for a charter firm, bought a Dh4.26 million property in upscale Portofino in Alabang. “This phenomenon of living in cramped accommodation has a flipside - dream houses at home,” explains Salazar.

Another developer, Megaworld Properties, has 200 buildings on offer targeting expatriate Filipinos, retirees and investors who want a piece of the action in the Philippines’ booming property sector.

Michael Sta. Ana, an accountant for a public relations firm in Dubai, has recently bought two properties: a 6.6-million-peso (Dh512,360) condominium unit in the upscale Canyon Woods nestled on mountain resort city of Tagaytay (an hour by car south of Manila) and a 40-square metre unit for 2.9-million pesos (Dh225,206) at the Canyon Cove, a beach resort in Batangas.

Millie Tajanlangit-Lim, a Dubai-based mother of four, also bought two units of two-bedroom apartments from DM Consunji’s Pasig project last June for about 3 million pesos (Dh232988) each.

Villenas, Salazar, Bianzon, Sta. Ana, Tajanlangit-Lim are just some of the thousands of young Filipino expats who are flocking to put their money where their heart is.

Hot property

Gino Macapagal, SM International sales mananger for Asia, said “Kabayans” in the UAE snapped up 200 million pesos (Dh20 million) worth of properties from them in 2007 -- 40 per cent of total international sales.

“Most of our buyers are young Filipinos in the 20s and 30s who saved enough for equity, then take out a mortgage,” said Macapagal.

Rosie Aquino, Dubai manager of Cnayon woods, said they sold 120 million pesos (Dh9.3 million) worth of properties last year in the UAE.

“We haven’t found the tipping point when more non-Filipinos would invest in Philippine property,” said Aquino.

Manila unveiled a freehold law allowing 100 per cent foreign ownership of condominium units in 1996.

Record remittance

Last year, Filipinos abroad sent $14.7 billion (Dh54 billion) back home, according to BSP, the Philippine’s central bank.

This, said Jovy Tuano, project director of the First Philippine Property Show held recently in Dubai, helps explain why the country’s property sector has withstood the “sub-prime” crisis that has cost US taxpayers $700 billion (Dh2.57 trillion) in bailouts.

To attract retirees from around the world, Manila also offers a special retiree visa (which allows anyone to “retire” at the age of 35, if he buys a property or parks $50,000 (Dh183,650) in a time deposit).

“This crowd (young Filipinos abroad) are our bread and butter,” said SM’s Macapagal.

SM has pumped 15 billion pesos (Dh1.16 billion) into high-rise developments and 5 billion pesos (Dh388 million) into Hamilo Coast, a leisure complex straddling picturesque coves in Batangas province south of Manila.