7 in 10 Filipinos Living in the UAE Are Looking to Buy Property According to Reports

7 in 10 Filipinos living in the UAE are looking to buy property according to New Perspective Media polls, the Philippine Property and Investment Exhibition reports. There are almost 700,000 Filipinos in the UAE, nearly half a million of which live in Dubai. Let’s look at the reasons so many Filipinos in the United Arab Emirates are considering buying homes in Dubai or back home in the Philippines. We’ll also look at their property buying patterns and impact on the real estate market.

The Statistics

According to a 2016 survey, 78% of Filipinos living in the UAE are planning on buying real estate in the Philippines or UAE in the next two years. Their planned purchases range from houses, to condos (flats) or land. This rate is much higher than the 43% who said they were thinking of buying real estate in a 2014 New Perspective Media survey. Those who planned on simply investing in property doubled from 22% to 46% over the same time period.

Buying Patterns

Many Filipinos want to buy real estate as an investment as compared to paying rent each month, while others see buying a property as an investment in itself. Manila’s residential real estate prices are growing the fastest rate in the Asia-Pacific region (not including Vancouver’s ultra-hot real estate market).

The eleven million Filipino expats sent $26 billion back home in 2013, accounting for about 10% of the nation’s GDP. This money is being used by their families to improve their lifestyles, including buying and building new homes in the Philippines. The Filipinos who want to buy real estate in the Philippines are eager to do so as soon as possible to lock in the prices as well as profit from the fast rise in real estate prices.

Filipino’s preferred real estate purchases depend on where they want to buy. Most state they want to buy a house in a gated community, a piece of land in the suburbs where they can build a home of their dreams, or a flat in the city center. Of those who want to buy real estate in the Philippines, 60% want to buy a house on a lot, 30% want to buy a condo, and 10% want to invest in a lot.

Buying land in the suburbs is seen as a way to protect one’s money, since the land will likely appreciate but can be sold to someone else if the owner needs to buy a flat instead.

Impact on the Real Estate Market

Dubai is unusual in allowing expats to buy land and real estate, instead of remaining renters. Filipinos account for about a fifth of the population of Dubai. When the majority of this population decides to buy homes and invest in real estate, it increases the prices of villas for sale and raw land on which homes could be later built. Filipinos are also investing in real estate in Dubai because interest rates are as low as 4% while personal loans are readily available.

Filipino expats buying real estate in the Philippines have enjoyed high wages in a tax-free environment, which is why 13% of those surveyed had a preference for high-end properties costing more than PhP5 million. This is driving up Philippines real estate prices and accounts for why the nation is one of the top ten fastest growing luxury markets on the planet. Most surveyed, though, had a PhP2 million price ceiling.

Many Filipino expats were also considering buying rental real estate to rent out to others in the Philippines, since the nation’s 7.53% rental yield is one of the highest in the world.

Conclusion

Filipino investments in real estate in the UAE and the Philippines are driving up real estate prices. In both locations, they are buying up flats in the city center, homes on lots in the suburbs or land that they can easily sell or build a home upon depending on future circumstances. Those buying homes back in the Philippines are sometimes doing so for investment purposes due to the high rate of return, while others are buying homes now because they don’t think they will be able to afford homes after several more years of inflation.