Real estate players see growth in mid-end market

By Rhia de Pablo Updated January 19, 2009 12:00 AM

Real estate players continue to see a growing trend of the middle-end market as the unabated growth of the business process outsourcing industry continue to pump in a growing income in this market segment.

In an interview, Engr. Rey L. Ralota, Subdivision and Housing Developers Association (SHDA) president and Ramman Realty Development Corp. president said that they remain to be optimistic that the real estate industry will continue to achieve an upswing this year fuelled by the foreseen growth of the middle-end segment.

“There is a growing, manifested demand of middle-class kind of developments here in Cebu and this can impact the growth of the sector this year amidst the negative forecasts brought by on-going global crisis,” said Ralota.

He said that last year, 72 percent of housing take outs from their segment was composed of economic housing with unit prices ranging from P300, 000 up to P750, 000.

However, they have also seen a growing demand in the middle-end housing segment in line with the further growth of the country’s business process outsourcing (BPO) industry.

“The middle-end housing development opens up as housing demand in this sector builds up along with the further growth of the country’s business process outsourcing industry which usually employs people from the middle class,” said Ralota.

Middle-end housing’s units range from P750, 000 up to two million pesos and above and these commonly are houses that are fully-furnished.

Meanwhile, Joseph Y. Sison, the VP for marketing and communications of Land Asia Global Properties Network Inc. also attested that this year, they are also looking at a growing trend of the middle market in terms of project category.

He said that employees from private companies mostly from contact centers have topped their buyer’s profile last year and this year they continue to see this segment growing along with the continuous positive growth projection of the BPO sector in the country.

Sison said that at the moment, more and more real estate developers are realizing this growing demand in the middle-end housing segment so most of them are shifting their focus to specifically building and doing middle-end housing projects.

“Middle-end units do not need to be improved because it’s good to live in as it was made. Homeowners can also do improvements unlike low cost houses which are limited to expansion and its bare so you still need to spend this is why a lot of developers are now shifting their upcoming projects in this market,” said Sison.

He explained that the rise of the middle-end segment reflects a growing consumer spending brought about by the positive inflow of investments from the growing BPO industry.

Sison said that usually, middle-end home buyers see real estate as investments for their future so at these tough times they are most likely to spend their hard-earned money on real estate which is something which can ensure them higher returns in the future instead of depositing in banks.

He said that this growing trend in the middle-end market segment has started since last year.