Welcome to 2016. Election year. Expect more money in circulation, most of it to benefit media as billions of pesos are being spent for election-related advertising. Of course, a substantial amount will also be spent for vote-buying but this is still to be quantified and measured from exit polls.
What can the real estate industry expect in an election year?
1 - There will be a slowdown in infrastructure spending because of the public works ban during the election period. But this will be temporary. Although major PPP projects are exempt from the ban, there will still be a slowdown in infrastructure spending because of the expected overhaul in leadership at all levels. In turn, a slowdown in infrastructure spending could naturally cause some developers to also slow down startup of new projects that are infrastructure-dependent.
2 - The outcome of the election is awaited. Will the new president be acceptable or will he/she be a marginal winner? Obviously, with 5 candidates, no one will get a majority, merely a plurality. So, a bit of turmoil can be expected if the outcome does not yield a convincing win. Political turmoil affects everyone, the real estate industry included. If buyers hesitate in deciding to invest their lifetime savings in real estate, developers will also pull back or slowdown construction.
3 - The real estate industry is OFW-driven. And for 2016, there are continuing global problems which dampening overseas placement of OFWs. The wars in the middle east has not fully abated. Terrorism is on the rise. And the oil-producing countries are not beginning to reduce production of oil, correspondingly reducing their need for workers in oil and gas. All these are negative for our OFWs.
Let us wait and see. It is not too long now.
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