Friday, April 04, 2008 Developer remains optimistic despite US financial slowdown
AN upscale property developer remains upbeat about prospects in the real estate industry in the country despite the looming recession in the United States, which could hurt the local property market.
“Whatever affects the US, affects the world. But now, the effect (on the real estate market in the country) is not too much (and) it can be minimized,” said Michael Reyes, Landco Pacific Corp. (Landco) vice president and head of the Visayas and Mindanao group.
In an interview, Reyes expressed optimism that while the US is now entering its first “full-blown” economic recession in 16 years—significantly affecting all US-dependent countries—demand for more residential developments in the Philippines, including high-end subdivision projects, will continue to rise.
This, despite warnings from some economists that the softening in the US market will have a “worse” impact on the Philippine real estate industry than the 1997 Asian financial crisis.
“We learned our lesson,” Reyes said, referring to how the country’s real estate sector recovered from the slump brought about by the financial crisis.
He said the real estate industry slump caused by the Asian crisis “was fueled by too many wrong speculations,” such as market saturation.
Today, the quality of property buyers have improved, said Reyes. He said buyers at present are “real buyers,” not speculators.
With growth in the call center industry and demand from overseas Filipinos, residential property developments are rising in number even in Metro Manila, where condominium acquisition prices and rents go up and vacancy rates falling, said Reyes.
He said it also helped that banks are now offering lower interest rates and attractive financing schemes.
While the purchasing power of many potential residential home buyers, especially dollar-earners, may be affected by the weakening of the US economy, Reyes is confident that shelter—type developments—like houses and lots and condominiums—will remain to be among the top priorities of many Filipinos. (MMM)
