With two major offices in the Philippines and several regional hubs, 100-plus employees (25 of which are engaged in real estate brokerage), Pinnacle Real Estate Consulting Services Inc. continues to see a lot of interest from investors in the Asia-Pacific region who are keen on Philippine opportunities. Here, Managing Director Michael Mabutol provides a closer look into what’s keeping the luxury market moving in the Southeast Asian country.
Please describe your current housing market.
Our current housing market is divided into several market segments: low-, mid- and high-end. High-end houses are priced around $6.5-$7 million, while high-end condominiums range from $1-$1.5 million. Mid-market houses are priced between $100,000-$200,000, while mid-market condominium prices range from $60,000-$80,000 USD. Our low-market, mass-housing segment homes are priced anywhere between $9,000 and $10,000 USD.
While prices are generally rising, we do see an exception within the mass-housing segment due to the government placing a regulatory control in order to keep prices within a range that’s affordable to the masses. In terms of inventory, the high-end segment is still healthy and profitable, while the mid-market segment continues to grow. The low-market segment’s supply is still behind in terms of actual need.
Tell us about the types of properties in your market, and which are most popular.
Most of our residential sales focus on the high- to mid-end segments, as these are the areas preferred by residential investors due to their potential rental income.
What types of buyers do you work with?
For houses, most of our buyers—especially for high-end products—are high-net worth individuals engaged in the leasing business. Mid-end homes are mostly being bought by Overseas Filipino Workers (OFW) and families who either choose to upgrade their homes or engage in home rental businesses. In recent years, there’s been increased take-up from foreigners, most of which are coming from China, Japan, Thailand and Korea, especially for mid-end and high-end condominiums.
What are some of the most important trends in your market?
Activity is still mainly driven by the Business Process Outsourcing (BPO) sector, which contributed to the growth of the middle class and enabled a lot of first-time homebuyers to purchase mid-end products. It also contributed to increased activity in the leasing of high-end houses and condominiums as expatriates continued to pour in.
What are your biggest challenges/opportunities for growth?
Since the growth in the real estate market is mainly driven by the growth of the BPO sector, the biggest challenge centers around how to sustain growth despite the shift in outsourcing policies of the United States, the United Kingdom and other sources of offshore businesses. The biggest opportunity for growth would be the Philippines’ independent foreign policy, as it basically opens more opportunities to countries like China and Russia.
How does being part of Leading Real Estate Companies of the World® help advance your business?
LeadingRE helps us connect to would-be investors no matter where they’re located around the globe. It provides the platform for seamless interaction between real estate professionals, while creating a business community without borders that transcends location and distance.
For more information, please visit www.pinnacle.ph.
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