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Philippine Condotels as an investment
Real estate news By Asia Property Report
September 24 - News
In the Philippines it?s not just that condos are comparatively cheaper and relatively more easy to maintain than a single-family home. In recent years, they?ve become the prime residential real estate investment and the best may be yet to come says Beth Collingz, International Sales Director, PLC International, the lead marketing partners for Pacific Concord Properties Inc?s Lancaster Brand of Condo Hotels. Collingz said according to her research into Philippine property values, since 2000, mid market condos in Metro Manila have increased in value 120 percent, at an annual rate of 17.14 percent compared to new homes rising some 25 percent since 2000 or 3.57 percent a year and resale homes rising 20 percent since 2000 or 2.85 percent a year.
The median price for an existing studio type condo in Metro Manila is around $53,000 for 2007, up some 55 percent from $34,000 in 2005 whilst mid range housing prices in the $90,000 range for 2007 are only up some 8 percent from $84,000 in 2005. Rising demand for condos, hotels, short and medium term rental accommodation, offices and shopping malls in the Philippines, home to a population of almost 80 million and with a significant number of the more than 10 million returning overseas Filipino ‘Baby Boomers’, is also fueling rents.
Residential rents in Metro Manila rose 26 percent in the three months to March 2007, their highest quarter-on-quarter increase in more than a decade, as more and more IT companies set up shop in the Philippines. Companies like Texas Instruments are investing $1B in expanded operations in the Philippines. High-end rents rose some 13 percent from a year earlier, said Collingz. Collingz projects that Rents in the region are set to effectively jump up by at least 8.7 percent per annum over the next five years, compared with 3.3 percent in the United States and 3.7 percent in Europe. Yields from 8 percent to as high as 14-16 percent ROI on rental income property contrast with the 4 percent to 5 percent that private equity firms get in the United States and Europe.
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