SHDA national president Ricky Celis. Photo from https://shda.ph/
(First of two parts)
The Subdivision and Housing Developers Association (SHDA) is confident that stimulating the housing sector may lead to further growth of the Philippine economy.
This pronouncement came after the organization noted that the sector made a significant contribution to the economy last year—accounting for P125 billion or 3.8 percent of the country’s P11 trillion gross domestic product.
And this is only the beginning, according to SHDA. “Thanks to the government incentives that give value-added tax exemptions to developers that produce socialized housing units, the licenses to sell issued by the Housing and Land Use Regulatory Board for socialized and low-cost housing is up by 17 and 23 percent, respectively,” said SHDA national president Ricky Celis.
The same goes for the luxury and high-end segments that have become a lucrative market for property developers in recent years.
But even as the country’s real estate sector is making great strides, developers are still behind the national target. The Philippines currently needs 3.9 million housing units, a demand that is growing at 3 to 5 percent every year.
“The prevailing environment only allows us to add around 200,000 units every year, which will not be enough since if we do not improve this capacity, the country would end up having a housing backlog of 6.5 million units by 2030,” Celis said.
Best strategy
Finding the best strategy to hurdle this challenge would be the main agenda of SHDA’s upcoming 23rd National Developers Convention, an annual gathering of members as well as allied industry partners and concerned government agencies.
SHDA first vice president Armenia Ballesteros explained: “Aside from satisfying one of the basic needs of man—decent shelter—real estate represents the spark plug which triggers income opportunities for various sectors and generates a market for the construction and allied industries. How do we stimulate growth in real estate? In 2012, SHDA challenged itself to answer this question and came up with The Philippine Housing Industry Plan: 2012-2030, an industry roadmap that provides data and other relevant information such as production capacity, affordability, financing needs, as well as regulatory framework.”
The roadmap is now an indispensable tool for industry collaboration, planning and coordination.
“With the roadmap, it should be easier for everyone to point out which segment of the market needs more of the houses that must be produced, what assistance from the government and other concerned agencies will be needed to realize this, and what other issues must be resolved as soon as possible,” said Ballesteros who is in-charge of the activities for the upcoming national convention.
Gaining ground
She added that the convention’s theme, “Gaining Ground: Collaboration for Continuous Inclusive Growth” sums up the aspirations of SHDA.
“We have lined up several topics that will be discussed during the two-day event happening on Sept. 25 to 26 at the Radisson Blu, Cebu City. On Day 1, ‘Recognizing the Economic and Social Contribution of Housing’ will give participants a better understanding of the current housing situation. This is important considering the housing sector plays a crucial role in the country’s infrastructure and social development,” Ballesteros said.
In the afternoon, the 23rd National Developers Convention will cover the topic, “Ensuring Industry Preparedness to Changing Business Environment.” To be discussed are a number of pending bills that both the Senate and the House of Representatives can pass to help the industry. These bills include land acquisition, site development and house construction, selling and property management. Emerging “green” technologies will also be discussed.
Best practices
For the topic, “Pursuing Synergy for 1 Million Homes,” the participants will discuss the best practices as well as address the bottlenecks that would affect SHDA members from achieving the short-term goal of producing one million homes by 2016. SHDA is also set to sign different memorandums of agreements with a number of concerned agencies as well as industry suppliers.
Ballesteros said: “Thanks to the roadmap SHDA prepared in cooperation with the University of Asia and the Pacific’s Center for Research and Communication, we now know that while supply of houses is fast catching up the demand in other sectors of the real estate market, particularly high-end condominiums, there remains a huge backlog in socialized (houses that are priced P450,000 and below), economic (houses priced from P450,001 to P1.25 million) and low-cost housing (house priced from 1.25 million up to P3 million).”
She noted that the government is now realizing that helping developers build more houses in these segments as well as assisting homebuyers to be able to pay for these houses will have positive economic impact.
Ballesteros said: “According to the roadmap we have prepared, a P1 million increase in investment spending in the industry generates P3.32 million in additional output to the economy. Also, a P100-million investment in construction is estimated to generate P47 million in additional household income which corresponds to 228 direct jobs created. There’s no more reason to ignore this sector.”