Real estate investment as a hedge against inflation – Manila Bulletin
Inflation is one of the major concerns that our economy is now facing. This is a consequence of global factors like the pandemic, the Russia-Ukraine crisis, and the depreciation of the peso. As a result, prices of food, energy, commodities, and other goods and services are sure to increase.
Based on the latest data from the Philippine Statistics Authority (PSA), the inflation rate rose to 6.1 percent in June. The year-to-date average is now 4.4 percent. The government, therefore, forecasts inflation rates to average 4.5 percent to 5.5 percent this year, higher than the target of 3.7 percent to 4.7 percent.
With inflation generally affecting particularly the savers and fixed income earners due to the erosion of their real income, other forms of investments are being sought after to mitigate the situation. One of the best ways to do this is to put one’s hard-earned money into real estate investments.
Opportunities in real estate
Since alert levels have gone down, travel restrictions lifted, the return to office and face-to-face classes have created strong demand for real estate and spaces for lease, pushing property prices and rental rates to rise. Construction costs have also gone up brought about by both internal and external factors affecting the Philippines. Housing prices continue to grow despite the rising inflation with a great potential to appreciate in value over the long term.
Proximity to public transportation is a key factor that contributes to the increase in property value. SMDC’s Light 2 Residences, situated along the Mandaluyong stretch of EDSA, provides a direct link to the MRT Boni station.
The depreciation of the peso, on the other hand, bodes well for our Overseas Filipino Workers (OFWs). The higher exchange rates and increased purchasing power will enable OFWs to buy a home for their family’s use or for investment purposes.
Property choices
Among the top developers today, SMDC properties are good real estate investments that allow more Filipinos to benefit from inflation and maximize potential gains over the long term. Their projects are strategically located in the metropolis, and in growth centers across the country.
Properties near the central business district are always in high demand, as they provide a convenient location that has access to everything that matters. SMDC’s Red Residences, located in Chino Roces, is an excellent vertical community to consider when looking for a development in Makati.
For young professionals working in Makati, SMDC has residential properties in and around the central business district that allow career-driven individuals to experience a hotel-like lifestyle and have convenient access to their places of work. These properties include Air Residences, Lush Residences, Mint Residences, and Red Residences. Given the proximity of these properties to major transport hubs like the Makati Intra-city Subway and the PNR Commuter Railway System, significant increases in capital value can be expected.
Providing better mobility and immediate access to major thoroughfares and public transportation systems, SMDC has developments that are situated along EDSA, which are just a few meters away from the MRT station, such as Fame Residences, Glam Residences, and Light 2 Residences.
SMDC’s Ice Tower Residential Office sits right next to the planned integrated monorail system in Pasay. With its proximity to the much-anticipated transport network, the value of this property is projected to increase significantly.
Historically, property values appreciate over time. Take the case of SMDC’s Shore 3 Residences in the MOA complex, which grew to its current market value of P385,000 per square meter, a 214 percent increase in the span of four years. SMDC developments in the Bay City, including Shore Residences, S Residences, Sail Residences, and Ice Tower Residential-Office, are projected to further increase in value due to the integrated monorail system that will be constructed in the area.
When looking for a channel to protect the value of money from rising inflation, property investment is an attractive option that investors should look into. However, when buying a real estate asset, it is important to consider the location, capital value appreciation and income-generating potential, and the reputation of the developer. All these key considerations are being offered by any SMDC development.
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