Getting into real estate investment is a lifelong dream for most Filipinos. Owning a condo or a house has appealed both to overseas Filipino workers and to Filipinos looking to start or expand the family. Today you can add Filipino Millennials to this list.
Filipino youth, who make up one-third of the country’s population and who populate a major segment of the workforce that’s driving the Philippine economy, are into real estate investing. The trend is expected to continue upward, thanks to their increasing income levels and the availability of affordable financing options.
But like with everything they do, Filipino Millennials have a different perspective when they approach real estate investments. It is an outlook that works well for both them and the real estate industry. We list five reasons why based on a survey conducted by Rappler with Filipinos aged 18-35, from August to October 2016:
1. Millennials are confident about their financial decisions.
Millennials are cautious when it comes to making any financial investments, especially a real estate investment. They are concerned about making the right kind of investment. So they look for factors aside from price and location to know if they are getting their money’s worth. They take into consideration if the investment does not compromise their values if the brand behind the investment performs well historically, and investment popularity, among other things.
According to the 2016 Rappler survey, young working Filipinos are also hugely reliant on research. While they may consult with a broker or sign up for a property tour or a site visit, they also do not hesitate to get more details about their investment through other ways before making an informed decision. They take advantage of social media and the Internet to know if the developer of the condo or house-and-lot unit is reputable, and if the property has a high rental income yield or will incur a favorable profit if they sell it at a premium.
2. Millennials are driven to hitting their life goals.
Today, we see a surge of Millennials putting money on investments that would pay off their financial goals. According to the survey, 49 percent of the respondents in their late 30s chose financial independence over following passion as the definition of success.
In order to do so, Millennials are not afraid to take on a little risk as compared to every other Filipino buyer. Conventional wisdom discourages putting all of one’s money into one big investment. But because of Millennials’ money savviness–as mentioned in their belief in investing in a condo unit or a house and lot will allow them to earn back their money quicker. For them, this justifies the decision to invest big.
Judging by Millennials’ money savviness, as touched on by the 2016 Rappler survey, these young people would prefer purchasing ready-for-occupancy (RFO) properties or pre-selling properties close to the turnover date to recoup their investment. To do this efficiently, it would be advisable for Millennials to draw up a financing plan first before committing to a real estate investment. The financing plan is supposed to do three things: first, cover current debt; second, raise the whole 20 percent downpayment; and, third, suggest ways to curb expenses and consumption so that the investor can keep up with the amortization payments. The plan will also choose a home financing option that will allow investors to become more aggressive in their amortization payments, therefore saving money on interest. The sooner they can fully complete the payment, the sooner they can tick this investment off their bucket list. This creates an ideal scenario for them to make rental or selling decisions in this growing real estate climate.
ALSO READ: Pre-Selling vs. RFO Units: A Buyer’s Guide
3. Millennials are self-centered with their decision-making.
According to a 2015 survey by Pew Research Center, people of Millennial age find real estate investments appealing if it serves their personal interests. From this study, we can deduce that Millennials value investing in a condo because, in the long run, it would save them money on what they usually spend on discretionary things like travel and fitness. Why spend thousands of pesos for a staycation at a hotel when you can do so in the comforts of your own condo where the swimming pool is just an elevator ride away? Why pay monthly gym fees and then drive in traffic just to work out when you can use the top-notch gym equipment at the clubhouse or in the condo gym? Why not host game night in your condo or at the clubhouse instead of spending money at a bar? You could also invite your friends to join you at a nearby food street fair instead of going to a mall. Millennials believe these types of small, early wins have an immediate and much greater impact on their financial lives.
4. Millennials want to put money on investments that support their ambition.
Filipino Millennials describe their personal goals as “ambitious.” And they would do everything in their power to achieve it, even if it means prioritizing their career. This is not to disregard their emotional needs, which should also be taken into consideration. To illustrate: living in a high-rise condo or in a house on a lot inside a gated community speaks volumes about one’s financial stature. The different amenities and features of a condo or house-and-lot unit, plus and the property’s location, should be able to serve Millennials’ modern needs.
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5. Millennials follow their passion.
What drives Millennials to invest in a certain residential project?
An industry expert said condos are the more popular investments with Millennials simply because it offers many possibilities for the property owner. For those who choose to live in a condo within a city hotspot, the amount of time saved on commuting to work or doing errands allows them to pursue other passions, whether it is shopping, going on a pub crawl with friends, or taking on a second job. Millennials who lease out their condos take on opportunities to become entrepreneurs and to widen their social circle with like-minded tenants.
Millennials don’t see making a real estate investment as just a money-making endeavor. For them, the money, time, and effort spent on buying a condo or a house and lot should also result in satisfying their personal values, enjoyment, and goals. Millennials believe that financial goals should go hand in hand with long-term satisfaction and fulfillment.
Avida Land helps Millennials achieve their real estate dreams by offering developments that are well-equipped to support that busy Millennial lifestyle. Visit Avida Land today and see which investment options are for you.
HOMEPOSSIBLE is where Pursuit of Passion all started. Originally a series of events by Avida, it encourages and educates the target market to take steps toward an independent life and gives them the tools for an easy home purchase. Through the HOMEPOSSIBLE series, Avida has helped Filipinos to be better informed on how they can maximize life opportunities; inspiring and empowering them to reach their life goals, which includes owning and investing in a home.