The Philippines Real Estate Will Benefit From Credit Crunch

Property developers borrowed simple money from several lending institutions and constructed too many units that went unsold, dragging down costs. In finance or accounting, bad debts are the part of receivables that could no longer be collected.

When “bad loans” become acute, financial institutions are becoming worried that typically result of the availability of loans decreased or a sudden rise in the expense of obtaining loans. Learn more about real estate business from experts at CitiGlobal marks 2015 as banner year, poised to be major real estate player in the Philippines.

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Since the UK and Europe are currently in a bad market condition, wise investors find a hedge to protect their money and perhaps even gain from a slow market. Unless you’ve got a significant cash upfront, you can’t buy a property with only a gorgeous face, a smile, a whistle and an empty pocket.

With 11 million OFWs or Filipino Expatriates working overseas, they’re buying to live rather than to speculate. They wish to come home with the feeling of pride and ownership. Also, because of a greater buying power of foreign currencies, OFWs are now getting “middle-class” Filipinos.

With this phenomenon, 80 percent of Philippine property buyers are paying the complete equity on a cash basis and just 20 percent are relying on bank financing. This is precisely the opposite of what occurred in America and in Europe where property buyers purchase to speculate, waiting for land prices to increase and they sell and many are through bank lending.

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