Impact of POGO Pull Out on Residential Real Estate Market

The influx of Philippine Offshore Gaming Operators (POGO) industry started its operations in November 2016 under the Philippine Amusement and Gaming Corporation (PAGCOR). POGOs are online-based gaming companies in the Philippines that offer gaming services to customers within and outside the country. Simply put, they are a casino industry classified as business process outsourcing (BPO).

In 2021, POGO contributed a total tax of P3.47 billion pesos or USD67 million to the Bureau of Internal Revenue. But, most POGOs were severely affected during the COVID-19 pandemic, which forced them to close down, leaving unpaid taxes to the government. In early 2022, the POGO industry only accumulated a total revenue of P1.67 billion pesos or USD32 million, a major decline from the previous years.

Unfortunately, the real estate market is one of the most affected sectors in POGO’s setbacks. Many of their customers used to rent condominiums as a place to stay while in the country. Real estate investors who also own various commercial office spaces for POGOs have hit hard the most. As a result, there is also a massive revenue decline in the real estate markets. 

How POGO Exodus Affects the Real Estate Market

As a real estate investor, the POGO pullout means something. Sure, you must be worried if it is still ideal even to buy a house and lot in the Philippines. However, this is not always the case. 

As mentioned, rents in apartments and condo units fell in the Bay Area in Paranaque City. It is the location where most POGOs operate. Quezon City and Alabang may also experience a downtrend in the coming months if POGO continues to pull out in the Philippines. This includes the Central Business Districts in Metro Manila, such as Makati, Mandaluyong, and Ortigas City. 

Based on the data conducted by Leechiu Property Consultancy, POGOs started vacating office spaces in 2020, leaving P1.4 billion in losses in office space rentals. What’s worse, it also leaves around 127,000 job losses. Restaurants and other commercial establishments that also depend on POGO workers may find it difficult to recover. In fact, it has been predicted that many of these establishments may only stay until December.

Investing in Real Estate: Is it the Best Time Today?

Even though POGO is slowly changing its course, the real estate market still thrives. Now that the Philippine economy bounced back to normal, foreign visitors and local tourists can explore the country. In compliance with the government’s protocol, many attractive spots in the country officially opened.

According to the Department of Tourism, over 1.3 million foreign visitors have visited the Philippines since August 2022. It has a significant increase compared to last year’s 163,879 records. It only means that the tourism industry is on track and can significantly impact the real estate industry.  

Therefore, POGO pullout may slow down some residential real estate market categories, but the real estate sector itself will not struggle. Hence, it is still ideal to invest in the real estate housing market amidst the economic downturn because of tourism’s boost growth.

4 Future-proof Strategies in Real Estate Investing

Facts and figures show that the bullish forecast in real estate is the best time to purchase affordable house and lot for sale properties. Despite POGO pullout, other industries continue to support real estate.

Here are the four (4) future-proof strategies in real estate investing.

1. Think about the future tenants' needs and what you want.

Consider what future tenants need if you’re buying a home as an income-generating investment. As a lesson of the COVID-19 impact, it would be ideal to know how prospective tenants' working behavior. With the rising work-from-home setup, you might as well look for a living space with a dedicated office. A spacious modern home can be a suitable option.

2. Determine how much you can afford.

Financial experts say aspiring homeowners must not spend over 30 percent of their monthly income on housing. It includes property taxes, interest rates, and insurance in general. Therefore, avoid buying more than you can comfortably pay for. Otherwise, you can be over-dropped and drown in debt before you know it.

3. Consider real estate in provinces or nearby Metro Manila.

If you are starting a new family or looking for an affordable house and lot, consider residential real estate communities in nearby provinces. Lumina Homes, for instance, offer budget-friendly housing packages in various locations nationwide. Living in provinces features a lot of benefits, such as a cleaner environment and lower crime rates.

Apart from that, you also have the greatest opportunity to explore its famous tourist attractions. You spend less time on travel and first-hand experience with the country’s must-see destinations.

4. Keep an eye on the supply chain.

An increase in the construction of new homes and other residential property means an increase in supply demand. Thus, there’s a huge possibility that this could help decrease real estate prices. Although many developers have stalled projects due to the pandemic, many homeowners could not afford to buy one. But, residential real estate developers are on a fast pace as the economy returns to normal. They are looking for ways to complete the projects to reduce operational costs and losses. So, watch out for supply chain issues.  

Gamble A Surefire Win Through a Real Estate Investment

Whether or not POGOs will fully exit the Philippines, investing in a residential real estate property is worth value for your hard-earned money. As a trusted real estate developer and among the major companies in property development, Lumina Homes realigned its housing projects for a much more affordable payment scheme. The recent pandemic has taught us to go beyond and adjust what future homeowners really need.

Regardless, if you prefer modern living and keep away from the hustle and bustle of the city’s life, we have different locations for you to choose from. These residential properties are strategically located to meet all your needs. From transportation access to business purposes in the nearby major cities, expect that we have the right home for your family.