Real Estate and Property Market (In Philippine Setting). 

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Real Estate and Property Market (In Philippine Setting)

Learning Objectives: 1.To define REAL ESTATE 2.To describe how the real estate sector operates within the national economy; 3.To distinguish between the market for real estate use (where space is rented or purchased for occupancy) and the market for real estate asses (where buildings are bought and sold as investments).

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-the national stock of buildings, the land on which they are built, and all vacant land. These buildings are used either by firms, government, nonprofit organizations, and so on, as workplaces, or by households as places of residence. When defined this way, the value of all real estate makes up the largest single component of national wealth. Distinction between real estate as space and real estate as an asset is most clear when buildings are not occupied by their owners.

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Real estate refers to land along with any buildings and natural resources attached to it—like water, crops, or minerals. Unlike personal property, real estate is immovable and includes both physical structures and legal interests in land Wikipedia. Philippine Example:  Consider a family-owned lot in Quezon City where a house stands and a mango tree grows—this combination constitutes real estate. Scenario:  An investor purchases a beachfront lot in Palawan; it includes the land, the bungalow on it, and the right to lease it to tourists. This bundle—land, improvements, and usage interest—exemplifies real estate.

2. HOW BIG IS THE REAL ESTATE SECTOR IN THE PHILIPPINES? (OBJECTIVE 2). 

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2. HOW BIG IS THE REAL ESTATE SECTOR IN THE PHILIPPINES? (OBJECTIVE 2)

MARKET SIZE: IN 2024, THE PHILIPPINE REAL ESTATE MARKET WAS VALUED AT APPROXIMATELY USD 90.51 BILLION, PROJECTED TO GROW TO USD 131.41 BILLION BY 2033, WITH A CAGR OF 4.34% IMARC GROUP. ANOTHER FORECAST FROM STATISTA ESTIMATES THE BROADER REAL ESTATE MARKET WILL REACH US$6.60 TRILLION BY 2025, DOMINATED BY RESIDENTIAL REAL ESTATE AT US$5.82 TRILLION STATISTA+1.
 ECONOMIC CONTRIBUTION: IN 2022, THE REAL ESTATE INDUSTRY'S GROSS VALUE ADDED REACHED AROUND PHP 536 BILLION (≈US$9.5 BILLION) STATISTA. IN 2019, FORMAL REAL ESTATE ESTABLISHMENTS NUMBERED 5,179, GENERATING ABOUT PHP 1,099.54 BILLION IN REVENUE; 87.6% OF THESE WERE COMPANIES OWNING OR LEASING PROPERTY PHILIPPINE STATISTICS AUTHORITY.
 CONSTRUCTION ACTIVITY HIGHLIGHT: RESIDENTIAL BUILDING PERMITS IN 2024 INCREASED MODESTLY—103,552 PERMITS, 17.45 MILLION SQM, AND A TOTAL VALUE OF PHP 215.72 BILLION (≈US$3.86 BILLION). Q1 2025 SAW FURTHER GROWTH: 26,441 PERMITS (+4.8%), 4.45 MILLION SQM (+13.2%), AND PHP 57.09 BILLION (+15.5%) GLOBAL PROPERTY GUIDE.

 SCENARIO:  A LAND DEVELOPER IN CEBU REGION INVESTS IN A NEW RESIDENTIAL SUBDIVISION, OBTAINING MULTIPLE BUILDING PERMITS YEAR ON YEAR, FUELING LOCAL EMPLOYMENT IN CONSTRUCTION AND SALES.

3. MARKET FOR USE VS. MARKET FOR ASSETS (OBJECTIVE 3). 

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3. MARKET FOR USE VS. MARKET FOR ASSETS (OBJECTIVE 3)

A. Market for Use (Space Occupancy) This covers renting or purchasing real estate for personal, residential, or commercial occupancy—including homes, offices, and retail stores. In Metro Manila, renting apartments or leasing condominiums is common, especially for middle-income families; housing affordability remains a significant issue Statista+1. Example Scenario:  A young professional rents a condo unit in Makati for work convenience—this is part of the market for use, driven by occupancy needs. B. Market for Real Estate Assets (Investment) This involves purchasing property to earn returns—through rental income or capital appreciation—rather than personal use. Activities include buying land or buildings to hold as investments, such as developing a property to sell later or renting it out for profit.
 Example Scenario:  An overseas Filipino (OFW) buys a condominium unit in Cebu as an investment, renting it out to tourists or long-term tenants—this is the market for real estate assets.

. Philippine Examples & Relevance
Mixed-Use Development:



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PHILIPPINE EXAMPLES & RELEVANCE MIXED-USE DEVELOPMENT:

Urban centers like Metro Manila are seeing a rise in mixed-use and transit-oriented projects, combining residential, office, and amenities to meet urban hassles and commuting challenges StatistaStatista. Scenario:  A real estate developer launches a high-rise complex in Quezon City combining condos, retail shops, and co-working spaces near a subway—addressing both the market for use (residents, workers) and market for assets (investors purchasing units to rent). Affordable Housing Demand: The Philippines faces a backlog of about 6.5 million housing units, particularly in urban areas like Metro Manila StatistaGlobal Property Guide. Government programs like 4PH aim to deliver 6 million affordable units by 2028 Global Property Guide. Meanwhile, critics point out overcrowding and housing shortages: “We face a housing crisis with a shortage of 6.5 million homes projected to rise to 22 million by 2040…” Reddit Scenario:  A socialized housing project targets low-income Metro Manila residents, providing affordable home-ownership—a case where the market for use meets social policy. OFW Investments: Remittances from OFWs play a major role in fueling real estate purchases for investment and life planning Statista+1. Scenario:  An OFW couple uses remittance income to acquire a residential condo unit in Davao. They rent it out, earning passive income and benefiting from capital appreciation—typical of the market for real estate assets.

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Learning Objective                                What You'll Know                                                                    Philippine Example                                                                                                                                                                                                                                1. Define Real Estate         Land + improvements + interest in property          A family lot in Quezon City with a house and mango tree                                                                                                                                            2. Sector's Size         Market value, economic impact             2024 market ≈ USD 90.5B; gross value added ≈ PHP 536B; strong permit growth

 3. Use vs. Asset Market        Distinguish usage vs investment purposes          Renting in Makati (use) vs. OFW buying condo for rent (asset)

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