By The Daily Tribune
Despite current global events slowing down the economic recovery process, experts believe that many industrial sectors can look forward to more positive circumstances in the near future.
The real estate industry in particular should look forward to steady recovery in the coming year and much better progress in the years to come. This is the fearless forecast of the Lobien Realty Group (LRG), one of the fastest-rising real estate consultancy firms in the country.
According to LRG, the Philippine real estate industry is very sensitive to the overall economic performance of the country. When the Asian Development Bank’s (ADB) reforecast the country’s 2022 GDP from 6.0% in April to 6.5% in September, it was taken positively by the real estate industry. This increase becomes even more noteworthy if contrasted with the downward adjustment of GDP growth for Asia from 5.2% in April 2022 to 4.3% in September. The Philippines is expected to overshoot its 6.5%-7.5% GDP target as a result of its Q3 GDP performance of 7.6% despite economic headwinds and high inflation. For 2023, the Philippines is again expected to grow by 6.3%, one of the highest growth rates in the region.
LRG recognized the undeniable relationship between the overall economy and the real estate industry. When economic outlook improves and GDP increases, the real estate industry also rallies to the point where a bull market prevails for years.
LRG expects the warehouse and storage sector to continue its growth trajectory for years to come. During the pandemic, this is the only segment of the real estate industry which did not contract- posting an 8.2% growth, primarily driven by the doubling of e-Commerce revenue in a span of two years–from Php 600 billion in 2020 to a projected Php 1.2 trillion industry in 2022. Meanwhile Real Estate Investment Trusts (REITs) delivered significantly on their promised dividend yield with 6.750% actual versus 6.768 expected dividend yield and are expected to outperform stocks until the majority of retail investors increase their stock exposure amid inflation concerns. The office space market lease-out rate has also improved as of 3Q 2022 (versus 2022) and is expected to further recover in 2023, underscored by probable decrease in rental rates as landlords push vacant spaces in the market and the increased demand due to economic recovery and back-to-work actions of most companies.
LRG always has and will always continue to keep tabs on the economic factors affecting the real estate market. In addition to monitoring vacancy rate, rent, and, demand & supply, LRG also monitors GDP from construction; the number of building permits; real estate loans; and even interest rates vis-à-vis the movements of several economic indicators to have a more holistic feel of the industry.
And with the expected economic recovery in 2023, LRG CEO Sheila Lobien avers: “Our fearless forecast: another frenetic bull run in the real estate market is expected after its recovery in 2023! Brace yourselves”.
Read more: https://tribune.net.ph/2022/12/08/bull-run-expected-for-the-real-estate-industry-in-2023/
