Cagayan De Oro—Despite joint-venture agreements’ popularity in business, these arrangements have remain largely untapped and under-maximized in the affordable and socialized housing segments.
At the recent national convention of the Subdivision and Housing Developers Association (SHDA) held in Cagayan de Oro, Pinnacle Real Estate Consulting president and managing director Michael Mabutol laid out the ways to attract more foreign firms to venture into the country’s housing market.
Sustaining the country’s robust macro-economic fundamentals is the first way, Mabutol said. . “A strong economy indirectly fuels demand by putting much-needed money to households. A steady household cash flow can encourage stakeholders to put their capital to housing projects because of greater demand with lesser risk of defaults.”
A second strategy is to keep a robust real estate market to incentivize participation of joint-venture stakeholders, especially foreign players. “Participants in joint-venture housing development would certainly enjoy the current uptrend of the market as it can mean a healthy investment,” said Mabutol.
Finally, improving the country’s regulatory framework that governs the housing sector would send a message to foreign players that measures are in place to protect their business interest, said Mabutol. “This is where the country can improve a lot.”
One such move is the passage of relevant pieces of legislation in housing, including the formation of the Department of Housing and Urban Development, the National Land Use Act, and the amended Comprehensive and Integrated Shelter Finance Act.
According to Mabutol, these bills aim to rationalize the use and allocation of land for housing and other needs, create a single program and policy-making arm of the government for housing and urban development, and provide access to financial assistance for individual home-loan borrowers without access to government or private funding.
Current housing scenario
Data from the Housing and Urban Development Coordinating Council (HUDCC) shows that the country’s housing backlog is already at 2.0 million dwelling units, primarily affecting the socialized and economic housing segment. This number is estimated to balloon to about 6.8 million shelters by 2022; and about 80 percent of the increase is mainly attributed to future and recurring housing needs related to allowance for inventory losses and increase in household population.
Statistics from the Housing and Land Use Regulatory Board (HLURB) show that the agency issued Licenses-To-Sell covering an approximately 238,000 housing units as a nationwide average for the last 5 years. However, only 101,000—equivalent to 42 percent of 238,000 yearly average—are dwellings (i.e., house and lot or condominium units) targeted for socialized and economic housing segments where the big housing shortages are traced.
