Healthy economic signs boost real estate sector

Healthy economic signs boost real estate sector

By Ehda M. Dagooc (The Freeman) 

CEBU, Philippines - As real estate products such as house and lots and condominiums become more affordable, it is no longer far-fetched for Filipinos to realize their dream of having their own properties, even for the ordinary wage-earners.
 Economist Eduardo R. Banaag, Jr., projected that in the next few years, more Filipinos will be able to own homes, even cars, as banks now ease up requirements for consumer loans to attract more borrowers.
Banaag said economic indicators have reflected the improving purchasing power of the average Filipino, which has in turn encouraged banks to offer attractive consumer loan packages.
He added that the real income of Filipinos has increased by 53 percent in the last five years in terms of per capita income, which has encouraged more developers to build subdivisions to take advantage of the increasing appetite for consumer loans.
The good economic fundamental of the Philippines, which also brought down a stable and lower interest rates, has further widen the doors for consumer credit offers, attracting more Filipinos to buy properties, may it be for personal keep or for investment purposes.
The low single-digit interest rate according to Banaag is expected to sustain in the long term, unless there is an adverse intervention in the economic development of the country, including external factors.
In general, he said interest rates will continue to settle, which in fact may be one of the lowest level in the last couple of years. Thus, he suggested that today is the right time for people to avail of the loans offered by banks.
Aside from the growth of BPO (Business Process Outsourcing) employment, tourism, and other industries, the sustained income of OFWs, despite the struggling economies of United States, and Europe also bolstered the improvement of Filipinos’ income.

The country’s financial system is carrying excess liquidity of at least P1.7 billion, and this has to be disposed to the system to further boost the economy.
Among other attractive sources of disposing this money is through loans, in both consumer and corporate loans, Banaag said.
Consumers will be able to get cheaper interest rate loan deals from banks, while corporate clients likewise are offered good rates for capitalization requirements such as real estate development projects, among others.
Last year, growth for real estate loans in the Philippines grew by 20 percent, Banaag said this figure is seen to grow further this year, while more banks are actively creating different packages for consumers partnering with real estate developers. (FREEMAN)