By Mynardo Macaraig
The Philippines’ famous diaspora of overseas workers is fuelling a boom in the real estate market back home as they snap up houses and apartments to safeguard their futures.
Property prices have recovered strongly since the global financial crisis of 2008, with investments from the 9 million Filipinos toiling away in foreign lands a significant factor, industry figures say.
“Overseas workers are moving the market. Properties now are selling and when there is demand, prices go up,” Emily Duterte, head of the Real Estate Brokers Association of the Philippines, told Agence France-Presse.
Industry sales nationwide this year are estimated to hit 300 billion pesos (6.9 billion dollars) compared with about 100 billion pesos each in 2009 and 2008, according to Claro Cordero from Jones Lang La Salle, a global real estate consultancy firm.
“Nobody thought there would be such a quick recovery from the slump that began in 2008,” said Cordero, research head of the company’s Philippines’ branch.
Filipino workers abroad have a reputation for working as lower-paid employees, such as construction workers, maids, sailors and janitors.
But their sheer magnitude — they account for about 10 percent of the Philippine population — mean they have long been a major force in the economy.
In 2009, they sent home 17.3 billion dollars, making up more than 10 percent of the nation’s gross domestic product, according to government data.
And Filipinos are increasingly moving into higher-paid sectors, such as medicine, engineering and the media.
Overseas workers usually opt for houses costing about two million pesos (45,000 dollars), humble by foreign standards but well in the middle-class bracket for Filipinos, according to Duterte from the brokers’ association.
Real estate investment
Fifty-year-old merchant seaman Rodolfo Oliverio has spent most of his working life outside of the Philippines but he is an active player in the domestic real estate market.
Oliverio has used his overseas earnings to buy two small houses in the heart of Manila for his wife and children to live in, and he is paying for a third he recently bought just outside the nation’s capital.
“If you work here, nothing will happen. The salaries are too small. The only way to afford a house is to become an overseas worker,” Oliverio told AFP while on his annual vacation in Manila.
“Naturally, among overseas workers, the most important thing is a house and lot.”
Oliverio said that as a ship’s bosun — the crew’s foreman — for a foreign company, he earned about 82,800 pesos a month, roughly four times more than he could earn doing the same job with a local cargo line.
Home sweet home
With his salary, he said he was confident he could afford the repayments on his third house, a middle-class 42-square-meter (452-square-feet) place south of Manila which cost a little over 1.5 million pesos.
Industry observers said Oliverio’s real estate goals were typical of many overseas workers.
“Most have left families back home so they want to have a home for their families. Their children, their parents, these are the ones who stay in the houses they buy,” said Duterte.
Filipinos have traditionally preferred living in houses, no matter how small, over apartments, but living overseas has started to change preferences.
Revitalized condo market
Overseas workers have revitalized the condominium market, said Manuel Serrano, head of the Chamber of Real Estate and Builders Association.
“In the beginning, they were more interested in house and lots but in the last two years, the tempo has changed. The demand now is for condos,” Serrano told AFP.
“Most of these people have gotten used to the lifestyle abroad and, in condos, they don’t have to worry about doing a lot of cleaning, gardening and watering of plants.”
Even for the traditional housing market, living overseas has changed the tastes of many Filipinos.
“A lot of developments are incorporating designs that are inspired by architecture worldwide, with a Mediterranean or an American feel,” said Jones Lang La Salle’s Cordero.
$15.5-B in first 10 months
Meanwhile, OFW remittances grew by 10.6% in October at $1.7 billion, the highest monthly level so far this year, the Bangko Sentral ng Pilipinas (BSP) said.
This brought remittances for the first 10 months of 2010 to $15.5 billion, up 7.9% year on year.
Money remitted came mostly from the US, Canada, Saudi Arabia, Japan, United Kingdom, Singapore, United Arab Emirates, Italy, Germany and Norway.
The BSP noted that steady demand for professional and skilled Filipino workers abroad, and increased access of OFWs and their families to formal money transfer channels continued to boost remittance growth.
Based on preliminary data from the Philippine Overseas Employment Administration (POEA), approved job orders overseas reached 578,535, of which about 39.2% was comprised of processed job orders for service, production, as well as professional, technical and related workers.
The central bank expects remittances to grow 8% in 2010 from $17.3 billion in 2009, a record high despite weak employment numbers worldwide due to the impact of the global financial crisis. (Agence France-Presse)