Weaker peso encouraging more real estate buyers

NOW that the peso continues to weaken against the dollar, some local property specialists consider this an advantage to the real estate sector.

Cebu Landmasters Inc. chair and chief executive officer (CEO) Jose Soberano III and Filinvest vice president for business development in the Visayas Allan Alfon see this development as having more income for families of overseas Filipino workers that can translate to added home purchases.

Although this could mean more expensive construction materials for them, the local developers said they have managed to source good construction materials still at reasonable rates.

“The slowdown of the global economy has made manufacturers realize that they could not also outprice themselves in the market. We have managed to get prices of construction materials at very good rates,” said Soberano.

Alfon, on the other hand, said property developers can always cost increase in construction materials through “effective value engineering” and yet retain the integrity of their projects.

Generally, both developers maintained that with the peso breaching the P49-level, this will spell more real estate purchases on the part of the consumers.

Likewise, broker Anthony Leuterio of Leuterio Realty has also observed, based in their recent international roadshows, that OFWs are more keen to invest in real estate now due to the present exhange rate.

“A lot of (OFW) buyers are happy because the value of their money (peso) is increasing,” Leuterio said.

While some brokers lure buyers to buy at this time given the exhange rates, Leuterio doesn’t personally recommend this investment decision.

“I tell them the peso always fluctuates. We don’t guarantee that the peso will stay at P49,” the broker added. He thinks such selling strategy comes out like a “scam” since the volatility of the exchange rates may affect the future value of their propety investment.

Financial analysts attribute this weaking of the currencies of emerging economies due to a looming US Federal Reserve interest rate hike. A Fed hike directs funds back to the US from emerging markets like the Philippines, which then drives dollar demand.