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Dubai: For many Filipinos working in the UAE, which remit millions of dirhams to their home country every year, there is no better investment option than real estate.
With property prices in the Philippines rising steadily every year, a growing number of expatriates from the Southeast Asian country are putting their money in property.
According to a new survey among 1,000 expatriates, Filipinos in the UAE prefer to send their money back home to acquire villas and apartments in urbanized locations, particularly those that are increasingly attracting domestic and foreign investments.
Topping the list is Metro Manila, the country’s capital, followed by Cebu, Laguna, Bulacan and Davao.
These destinations, particularly Manila and Cebu, are growing in popularity because they are hotspots for the booming business process outsourcing (BPO) industry in the Philippines.
Over the years, a number of call centres, as well as other companies offering back-office and support services, have set up businesses in Metro Manila and Cebu City. The number of workers in the country’s BPO industry expanded to one million last year.
“[The choice of locations] is attributable to the present and forecast boom in the offshoring business, which is increasing urbanisation, while also driving job creation to urban areas,” according to New Perspective Media, which conducted the study and is organising a real estate event in Abu Dhabi, the Philippine Property and Investment Exhibition (PPIE).
Quoting another study in the UAE, the company said a huge proportion of Filipino expatriates (43 per cent) prefer to buy a house and lot, while 32 per cent would rather invest in condominiums.
Although many are still struggling to save, the majority of Filipinos are reportedly willing to spend 1 to 5 million pesos (nearly Dh100,000 to Dh400,000) in real estate.
The real estate market in the Philippines, whose economy grew by 6.1 per cent in 2014, has been rising strongly in recent years. The Philippines emerged as the fourth best performer in Global Property Guide’s recent price survey.
According to the research, real estate prices in the Philippines climbed by nearly 10 per cent over a one-year period. The average price of three-bedroom apartments in Makati Central Business District increased by 8.95 per cent in the first quarter of 2014 from a year earlier, “a sharp improvement from the annual growth of 2.32 per cent” in 2013.
“Data from global property research and consultancy firms show that increase in both prices and rents in the Philippines are outpacing growth in the Asia-Pacific region. This offers [Filipino expatriates] the perfect combination of reasons to invest in real estate at this time – price appreciation as well as rising rental yields,” New Perspective said in a press release.
The Philippines’ consul general in Dubai, Frank Cimafranca, observed that many Filipinos in the UAE believe that investing in real estate is lucrative, considering that prices have been consistently rising every year.
“We have also seen that more and more overseas Filipinos in the UAE are investing in property. We believe more [overseas Filipino workers] will invest in property in coming years as prices continue to appreciate year after year resulting in better returns on their investments,” Cimafranca said.
Philippine Ambassador to the UAE Grace Relucio Princesa echoed the consul-general’s comments, citing that many Filipinos working overseas now look at real estate as a major investment option. “The Philippines has been forecast as Asia’s next economic miracle and investing there would likely yield better returns than elsewhere in Asia.”
Princesa, however, admitted that a huge proportion of Filipinos in the UAE are still struggling to save. “Less than 40 per cent of Filipinos in the UAE save money. The rest are just consumers,” she said.
Karen Remo, managing director of New Perspective Media said analysts have also forecast significant investment gains from the Philippines’ real estate sector.
“Many global financial institutions have forecast good investment returns in the Philippines, which is one of Asia’s most steady economies. The rental yield of 7.53 per cent is among the highest in the world, beating Hong Kong, Singapore, Indonesia and India,” she said.
The UAE, home to around 750,000 Filipinos, recorded $28 billion in remittances to the Philippines in 2014 alone, according to World Bank data.
The property exhibition in Abu Dhabi will take place on March 20 and 21 at the Liwa Grand Ballroom of Le Royal Meridien hotel.
Source: Cleofe Maceda, Senior Web Reporter