Land reclamation is not a new concept in the Philippines.
Angelo G. Garcia
Real estate is a booming industry especially in developing countries like the Philippines. A strong property market is an indication of a good economy, which means a lot of investment opportunities for citizens.
The market is so hot right now that developers are even looking at the sea for future developments. That's right, land reclamation projects.
Land reclamation is not a new concept in the Philippines. The country has several existing reclaimed land like the stretch of Roxas Boulevard in Manila and several areas in Cebu.
But probably the most famous reclaimed land in the country is Bay City in the cities of Pasay and Paranaque. This project, which started in the late '70s, is a good example of a successful reclaimed property.
This area—home to cultural centers, malls, an amusement park, casinos, hotels, condominiums, office buildings etc.—has become a center of growth in the two cities and is considered as one of the country's main business and leisure hubs.
But in a few years, Bay City will have new neighbors because of several land reclamation project proposals in nearby areas, from the shores of Navotas to the coastal areas of Cavite. Developers of these mega projects plan to build more commercial, industrial, and residential properties to entice investors.
While some are concerned about the environmental impacts these projects may cause to the already ailing Manila Bay, others are uneasy about the effects they may bring in the real estate landscape of Metro Manila.
One of the major issues in local real estate today is the upward tick in property prices. The increasing prices are mainly driven upward by the high demand coming from foreign buyers like Chinese nationals. According to reports, the bulk of these Chinese buyers are acquiring properties in the bay area.
Fitz Villafuerte, an investment expert, is unsure about how the future land reclamation projects will affect the local real estate economy. According to him, at this point, it's still hard to tell especially most of the projects are still just plans.
“It's hard to say at this point how it will affect the real estate economy of Manila. Currently, prices are already sky-high due to the influx of Chinese businesses who are renting and buying properties for their online gaming/gambling operations. My guess is as good as yours,” he explains.
If the current state of the industry is any indication, then foreign buyers may play a key role in these projects. Developers cannot rely on the local market alone because foreign investors are major clients as well.
“Indeed, prices are being driven upward by foreign buyers. New projects will definitely start at current prices, which are already high. Whether they will drive it further up or not is hard to predict. But it will indeed be bad for Filipino buyers,” he explains.
However, he pointed out that the bay area is just a small portion of Metro Manila and there are other areas in the National Capital Region where Filipinos can invest in properties.
“There's rising demand for properties in cities adjacent and near the Bay Area (Cavite, Paranaque, Las Pinas, Taguig, etc.)—so there's still opportunities here for Filipinos who can't afford Bay Area properties,” Villafuerte says.
Safe to invest?
One of the main concerns of investors to land reclamation projects is their safety. The Philippines is prone to earthquakes and typhoons. Whether developers like it or not, the integrity of a reclaimed project will be questioned.
“When properly done, reclamation of land will be safe and will not have a significant environment impact. This means, ensuring that there are no habitats being destroyed, ecosystems are preserved, and affected marine species are relocated into a new area,” Villafuerte says.
“In terms of the construction, there are many ways to reclaim land, and there are methods that will ensure that the new land will be safe and stable, especially against soil liquefaction and earthquakes,” the financial advisor adds.
The Bay City is proof that investing in properties on reclaimed land is no different from investing in properties on regular land. But investors need to remember that there are basic rules when it comes to property investment.
“Always simulate your cash flow before buying a property. Just because you can afford the down payment doesn't mean you can also afford to pay the mortgage that comes after,” he says.
Buying a residential property is not the only way one can invest. Consider also investing in commercial and industrial properties.
“Also, real estate investing is not just about buying properties. There are actually a lot of ways to make money from it. You can explore residential, commercial, and industrial properties. There's also foreclosed property investing,” Villafuerte says.
“Moreover, aside from the straightforward buying and selling, there's also buying and then having your property rented out, or selling as a rent-to-own. You can do long-term leasing, or short-term stays (i.e. AirBnB),” he adds.
While the land reclamation projects are still on planning stages, there are a lot of investment opportunities in real estate now.
“There's no specific right time and specific right place. There's only your real estate business and investment goals—and then finding the right property at the right location that can help you achieve that goal,” he ends.
ANGELO G. GARCIA is a freelance journalist who contributes to ABS-CBN News Online and Manila Bulletin Lifestyle. He's the former section editor of Campus, the education and youth-oriented page of Manila Bulletin Lifestyle. In 2014, he won the top honor in the Lasallian Scholarum Awards for his feature article. He is also works as a social media manager for various local and international brands.