In response to the increasing role of Southeast Asian countries in the global community, the Association of Southeast Asian Nations (ASEAN) leaders—11 of them, including the Philippines—signed the ASEAN Economic Community (AEC) blueprint in November 2007 and officially formed the AEC earlier this year, in anticipation of a regional economic integration by year-end.
The main purpose of the ASEAN Integration is to create more jobs and income, and boost investments among member countries by creating a single market with free flow of goods, services, investments, and skilled workers.
With the ASEAN Integration just around the corner, expect a more robust economy and business environment, which can lead the way for an even healthier local real estate market.
The ASEAN Integration anticipates the following:
The ASEAN Integration is expected to encourage highly-urbanized cities in the region to build more infrastructures—mostly commercial and residential. The construction of new malls and retail complexes will eventually translate into an even more potent real estate market. It will not only boost the Philippines’ property industry but also its construction industry, thus creating more jobs for Filipinos.
Soaring Foreign Investments
There will be a higher demand for office and residential spaces from foreign investors. However, the Philippine government may need to attempt to push for a constitutional change anew to amend the prohibition of foreigners to own land in the country.
The potential influx of foreign investments to the Philippines as well as the emergence of new growth areas and economic hotspots in the region will help improve tourist arrivals in the country, which should also make a positive impact in the real estate sector.
Intense Global Competition
To realize the goals of the ASEAN Integration, member countries are expected to intensify real estate and construction activities, thus creating a stiffer competition among them. Essentially, the Philippines has to take on the challenge and do its part to remain a strong industry player. In fact, the Chamber of Real Estate and Builders’ Associations Inc. (CREBA), the largest real estate umbrella organization in the Philippines, has been encouraging its members to pursue more relevant market reforms to stay competitive.
Since the local real estate industry will now be exposed to international markets, major operations should be expanded and properties should be acquired both from inside and outside the Philippines.
Additionally, the ASEAN Integration espouses the elimination of tariff on goods and services, which gives the consumers more money to spend.
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