wharton | Real Appraisal

Having a view on the macroeconomic trends is critical when analyzing the real estate market. Real estate does not operate in a vacuum. Thus, it is essential for a real estate practitioner to grasp the role of the industry and knows the current events and how macroeconomic affect the real estate market, both in the aggregate supply and demand and the expectation of the buying public.

Real estate plays an important role in the economy. Residential real estate provides housing for families. It is the greatest source of wealth and savings for many families. Commercial real estate, which includes apartment buildings, create jobs and spaces for retail, offices and manufacturing. Real estate business and investment provide a source of revenue for millions.

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Real estate, renting, business and construction are both measured by, and contributes to Gross Domestic Product (GDP). As shown in the graph, its growth continues. In 2016, it contributed P1.8 trillion, 13 percent of the country’s gross domestic product. It exceeded its 2000 record of P3.5 trillion. At that time, real estate, renting and business was a hefty 9 percent component of GDP.

Private construction, which is mostly done by property developers and individuals, contributed P1.2 trillion in the gross domestic product. It is one of the contributor in providing employment and help in lowering unemployment rate.

Beside GDP, real estate market in the country is fueled by increasing foreign direct investment. Since 2007, the accumulated foreign direct investment totalled to P 2.1 Trillion. Meanwhile, the overseas Filipino workers remittances increases by 17% . From 22 Million in 2013 to $ 26.8 Million in 2016.

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Understanding key real estate relationships has a strategic implication on real estate decision making and portfolio management. The changing real estate environment can be linked to the macro-economy. Knowing the relationship between macroeconomic variables and real estate performance , and knowing whether these links are consistent or changing overtime ca provide a useful tool in leveling up our service to our clients and to our daily real estate practice.

Appraiser Planner Gus Agosto attended the Forum with visiting professors Dr. John Leung from City University of Hongkong and Dr. Brian To from Singapore Management University as speakers. Dr. Leung discussed the topic “Entrepreneurship is Service”, while Dr. Brian To share the topic “Managing Yourself”.

Both professors were distinguished and successful on their own field. Dr. Leung is currently the Director of Executive MBA program, and an Associate Professor of Marketing at City University of Hong Kong. While Dr. Brian To is a Senior Practice Professor of Strategy and Leadership and Senior Wharton Fellow of University of Pennsylvania.

“The more I learn, the more I realize that there are more things I need to learn and discover”, Appraiser Planner Gus said. Gus is also a faculty member of the University of San Carlos.

The forum, organized by the School of Business and Economics, was held last August 24, 2015 in University of San Carlos Downtown Campus. “The pace of innovation in business are now moving fast, and I want to learn more to provide my clients of top of the line solutions”, Gus ended.