The appeal of Philippines property

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I have been writing about the appeal of Philippines property for about 7 years now. The Philippines is in the midst of a property rally that will last for another debate. Now, we are seeing signs of serious support for the boom from Asia, and you can expect more interest still from outside the region for several reasons:

1. Rapid population growth - the country's population is growing 2% per annum

2. High urbanisation rate - the nation's population is rapidly descending upon the cities - as is always the case in industrialising economies.

3. Rising incomes - The Philippines holds a unique position in the business outsourcing market. Its people are 'uniquely' friendly, English speakers, and well-placed to serve in various customer service, call centre, sales roles in the future. These skills of course have to develop; but its less of a leap for them than other cultures; which is a 'value distinction'.

4. Visa restrictions - This is plausibly only a short term value, but the Philippines offers the most relaxed visa restrictions in the world. You can stay in the country 18 months before requiring a visa, and there are steps to make it even more liberal. 

5. Safer place - There is reason to think the Philippines is safer. The south has been constrained 'investment wise' by Muslim terrorism and militancy that saw some foreigners subject to extortion, or killed. A truce between the Muslims and the Philippines government is giving people confidence in peace. In any respect, the associated violence has largely been confined to the southern island of Mindanao. Investors might see this as an opportunity in the south, or a tentative reason to stay in the north/central archipelago. 

6. Familiar legal system - People will appreciate the Western legal system, the centrality of the Philippines in Asia. The place has a number of discount airlines servicing it, i.e. Cebu Pacific, Air Asia, Tiger Airways, Scoot and others. Corruption remains a problem, but there have been strides at the top to tackle that problem. The chief justice of the country has been impeached, numerous senators implicated, and the plot thickens. None of this really reflects the small investor. 

7. Happy, friendly people - The Filipino is of course a source of joy and a friendly face. They are always a pleasure to be around. 

8. The place - Not the prettiest place in the world - but then expect future development to hold more on offer. Most appealing places these days are products of people's imagination. This imagination is in short supply in the Philippines; and scarcer still outside of Metro Manila. This inevitably means 'the life' sought by foreigners is either in a restricted number of resort centres like Boracay, Bohol, Cebu and Davao, or in the city centres like Ortigas, Makati, the Fort and Trinoma (in Manila), or pplausibly places like Vigan City and Baguio in the north. These developments are invariably controlled by a few very powerful local business people. 

I have said a lot about the Philippines; so feel free to read more. Its early days still given that yields are very attractive, and most of the investment to date has been driven by expats rather than foreigners. Yields remain around 7%, so these countries are cheap - particularly in comparison to other Western nations. Moreover the incomes are rising as fast as the property prices, so yields are largely preserved. We are destined to see more Western money flowing into these countries. A direct investment in property is one of the few effective ways; as well as offering a lifestyle benefit. Being an Australian, living in NZ, I come to the Philippines annually to shop and basically to escape the winter. 

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Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com