Overseas Property News

Philippines

EU Philippines Grant Could Boost Property Market

It is commonplace for the new Eastern European emerging markets to receive grants from the European Union to stabilise their economy and develop their infrastructure in preparation for joining the EU -- Montenegro and Albania for instance. The Philippines however is a little outside the EU's catchment area, a fact that hasn't stopped the EU from giving a €61million grant to the Philippines .

The money is to help towards funding a series of reforms recently planned by the Philippines government for the health service, better protection of human rights and efforts towards finding peace with Muslim rebels.

Such a large amount of money, on top of the Philippines economic growth should help bring the Philippines government a lot closer to solving some of its major problems. David Stanley Redfern's head of international research Liam Bailey explained what effect it will have on the Philippines ' real estate market:

"In terms of potential for growth, Philippines property is among the best in the world. Rental yields are picking up from around 8%-10%, should be around the 12% mark by the end of the year and could continue to rise. But the main centre for the growth is Manila , outside of Manila it is a completely different picture: poor distribution of wealth, high unemployment, poverty, human rights abuses, slave labour, and the list goes on."

Bailey continued: "The situation outside Manila is about the only thing that could put people off making a property investment in the Philippines , if this aid has the effect I think it will, the situation outside Manila could improve drastically, therein taking away the final potential obstacle to the country's growth into one of the world's foremost property investment hot-spots."

Even with the current situation, David Stanley Redfern Ltd have had no shortage of interest in their Manila apartments, but maybe that is because they present such a great investment opportunity. Liam Bailey went on the record as saying that Manila property prices will be at least twice what they are now in two years time. £28000 buys you an unfurnished studio apartment in a Manila high rise, Manila is a hot-spot for capital growth, and the Atrium towers are in a growth hot-spot even for being within Manila .

The Makati financial districts is set to grow into one of South East Asia's trade and industry hubs, and the demand for quality rented accommodation is growing at a spectacular rate, this gives the Atrium apartments the potential for residential lets at high yields. One tower has already been completed giving potential buyers the opportunity to view images of the finished product.

There are no direct restrictions on foreigners buying condominiums in the Philippines , only that no more than 40% of the development can be sold to foreigners. Capital Gains Tax is rather high at 25% with no reductions, and rental income is also subject to a 25% tax. That seems like a lot but given the potential size of the rental and capital gains, even in a very short space of time, the profit left after tax is still going to be as high as any other investment hot-spot.

Find out more about Philippines investment property at:
http://www.davidstanleyredfern.com/investment-property/philippines/

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