Property developers remain bullish despite slower GDP

MANILA, Philippines - The slower gross domestic product (GDP) growth in the first quarter of 2017 would not have any impact on the property market’s growth, a property consultancy firm said.

“I think property developers take a much longer term look – and one quarter GDP is not going to stop them from making their long term investments,” KMC Savills Inc. managing director Michael McCullough said in a phone interview.

Earlier this week, the government reported that GDP growth slowed down to 6.4 percent in the first three months, lower than the 6.8 percent growth recorded in the same period a year ago.

“It’s still growth, so any positive growth is still great news for the country,” McCullough said.

Jones Lang Lasalle Philippines regional director Sheila Lobien echoed McCullough’s sentiments.

“In the real estate sector, my view is that a quarter of unmet expectation will not have dire consequencies at once,” Lobien said.

Lobien explained while the GDP results might be disheartening at first glance, several factors should be taken into consideration when viewing the slowdown, in order to situate it better.

“Government spending growth was close to 12 percent as it was an election year. For 2017, government spending growth was a mere 0.2 percent,” Lobien said.

The regional director also noted the Philippines is still the fourth fastest growing after India, China and Vietnam.

Similarly, Colliers International noted that the country’s economy historically slows down a year after elections due to a high base effect and the wait-and-see stance of investors.

Meanwhile, the outsourcing-led services sector, which continues to drive the office property market, recorded a slower growth at 6.8 percent due to lower share in aggregate office take-up in Metro Manila to 21 percent.