Overview

The real estate industry encompasses the many facets of property, including development,
appraisal, marketing, selling, leasing, and management of commercial, industrial, residential, and
agricultural properties. This industry can fluctuate depending on the national and local
economies, although it remains somewhat consistent due to the fact that people always need
homes and businesses always need office space.

As cities developed, the need for real estate transactions increased. Office buildings, retail
centers, hotels and restaurants, and residential housing boomed, and someone was needed to
develop, sell, and manage it all. Soon, urban sprawl would create the need for suburbs, and with
that more housing, town centers, and eventually, businesses.
The real estate industry is an important element of the economy. In the mid-2000s, the industry
faced major challenges when the commercial real estate market peaked and then fell in step with
the recession.
The Philippines real estate market has been penetrated with high investments arising from the
presence of both, domestic and international players, in the market.

Drivers

A growth in the number of multinational companies and BPO’s, increasing urbanization and
expansion in the real estate construction projects are the major drivers for the real estate sector in
the Philippines. More number of Filipinos are moving to urban areas and are adopting better ways
of living and the difference between the rich and the poor is on the decline leading to growth in
the middle-class population that can afford to buy properties. Moreover, a large chunk of the
population works in the large number of BPO’s and MNCs, which are expected to rise, leading to
an increase in the demand for commercial spaces.

Restraints and Challenges

Currently, it is important for the real estate developers to meet the growing demand for properties
in the Philippines. It is necessary to solve the problem of housing backlog in the market. Moreover,
the major challenge the government faces is to boost the infrastructure spending and provide more
incentives to the real estate developers so that they shift their focus towards socialized housing.
The fear of property bubble has been around for some time now and has limited the growth of the
market.
Opportunities

Investing in real estate is considered as one of the best investments, globally. The size and scale
of the real estate market make it an attractive and lucrative market for many investors, who can
invest directly in physical real estate or choose to invest indirectly through managed funds.
Investing directly in real estate involves purchasing residential or commercial properties to
generate income or for resale at a future time. The Philippines, being a developing economy, will
never be short of opportunities and in addition, more people are adopting urban lifestyles.