Vol. XXII, No. 84 [ BusinessWorld Online ]
Thursday, November 20, 2008 | MANILA, PHILIPPINES
BY KRISTINE JANE R. LIU, Reporter
PROPERTY DEVELOPERS have shifted their focus on Filipinos working in nontraditional markets abroad, as the global economic downturn takes its toll on migrants based in the US.
In a press briefing, property investment company CDC Holdings, Inc. said countries in the Middle East are the next best and safest destination for property developers given the high concentration of Filipinos there with high disposable income.
"Compared with other countries, Filipino workers in the Middle East are a good market because they are more likely to return to the country," said Charlene Chua, CDC vice-president for sales and marketing.
She said the Middle Eastern market comprises end-users who buy a house for their own use and not as an investment decision.
Ms. Chua noted that the buying behavior of Filipinos working in the Middle East are "more stable."
"They have no fancy lifestyles and their expenses are more controlled. Also, there is no tax in the Middle East, giving these people a huge disposable income, almost half of which will more likely be invested in properties back home," she added.
Data from the Philippine Overseas Employment Administration showed that in 2007, about a tenth of the total 80 million Filipinos were working abroad.
A quarter of them were deployed in Middle Eastern countries, making it the second choice for work destination next to the US, Canada and Guam, which account for 42%.
Only 4,000 of the Filipino population in the Middle East have chosen to live there permanently, while around two million are staying there temporarily.
On the other hand, 2.9 Filipinos in the US are permanent residents, and only 300,000 are temporary residents.
"This is the special niche market of the Middle East. Unlike those in the US, Filipino workers there are usually first-time home buyers," CDC President and Chief Executive Officer Melesa D. Chua said.
Ms. Chua said most of their buyers are from the mid-income bracket, receiving a monthly salary of $1,000. These are willing to spend P1 million to P2.5 million on property.
"This market is continuously growing. The company, in fact, will be setting up offices in Oman, Bahrain and the United Arab Emirates to better address this market," she added.
CDC Holdings expects to almost double sales this year to P1.8 billion from last year. Many of these units will be sold to Filipinos based in the Middle East.
Like CDC Holdings, big property developers like Ayala Land, Inc. and Lucio Tan-led Eton Properties Philippines, Inc. have also shifted their attention to this sector.
Ayala Land earlier said sales to the US fell by almost half in January to June, while sales to Middle Eastern buyers rose by three quarters.
"With the lingering crisis in the US, Filipinos based there are trying to hold on to their money. That is why property developers have shifted their focus from the US to the Middle East and Europe," said Ramon E. Aguirre, research manager of Colliers International.
He said Filipinos working in the Middle East also enjoy more job security despite the crisis given the construction boom in Dubai, which needs more manpower.
"It does not matter whether it’s a horizontal or a vertical development, as long as the house is within their buying capacity," Mr. Aguirre said.
He added that Filipino workers abroad are more likely to buy houses, which they regard as a measure of success.
