This post originally appeared in Lamudi.com.ph as part of the #AskLamudi series.
Q: How Will the ASEAN Integration Affect the Local Real Estate Market?
A: The ASEAN Economic Community (AEC)—the fusion of the economies of the 11 member-states of the Association of Southeast Asian Nations (ASEAN), to take place in 2015—is expected to bring four changes to the Philippines’ real estate sector.
1. Stronger demand for commercial, industrial, retail, and residential space.
Since the AEC envisions unimpeded movement of goods, services, and skilled labor, as well as a freer flow of capital among the ASEAN member-states, businesses from abroad are expected to expand their operations in the country. There would be more need for office, industrial, and residential space for these foreign investors.
The elimination of tariffs on goods and services is also foreseen to result in a wealthier Southeast Asia. With a higher disposable income, people would have more money to spend, thus the need for more malls, retail complexes, and other shopping developments.
2. Emergence of new growth areas.
Places other than Metro Manila and Cebu may need to be tapped to meet the demand for business and residential space, leading to the emergence of new economic hot spots. Among the possible growth areas are Iloilo, Cagayan de Oro, Angeles and San Fernando in Pampanga, and General Santos City.
3. More—and better—construction projects.
High demand plus a strong inflow of capital will make construction companies race to build the infrastructure, offices, retail complexes, and residential developments that a booming economy needs. The increased mobility of skilled labor would also allow the exchange of best practices in the ASEAN region, leading to better urban design and development.
4. Changes to the prohibition on foreigners from owning land.
With the influx of foreign investment that the AEC will bring about, the Philippines is almost certain to face pressure to amend the Constitution’s prohibition on non-Filipinos from owning land. With the lifting of the prohibition, many expect that the country’s foreign direct investment will soar to a new high.
Lamudi is the Philippines’ fastest-growing online property portal and is currently available in 28 countries in Asia, the Middle East, Africa and Latin America, with more than 500,000 real estate listings across its global network. Primavera Residences, the first multi-awarded eco-friendly property in Cagayan de Oro, is one of the properties presently listed in Lamudi.