Property investments in special economic zones (SEZ) have gained significant traction in the Philippines because of the booming busy communities within the country. These SEZs are strategically placed across the archipelago to encourage more developments and opportunities within a specified area.
So, what exactly are they and what is their purpose?
In this article, we dive into the concept of SEZs in the Philippines, its property investment benefits, and the essential factors you need to take into account before you finalize your purchase. Consider this as an extension of the home-buying guide, helping you understand the process of moving into special economic zones.
What are Economic Zones?
According to the Philippine Economic Zone Authority (PEZA) and the Special Economic Zone Act, SEZs are areas that have high potential to be developed into industrial, recreational, commercial, and financial centers. These locations are subject to specific economic regulations and incentives that differ from the rest of the country, established by the government to promote economic growth and foreign investment.
Some key characteristics and purposes of SEZs are:
- Tax Incentives: Economic zones often offer tax benefits to businesses operating within them. These incentives may include reduced or zero corporate income tax, customs duties, or value-added tax for a specified period. These tax breaks aim to attract both domestic and foreign companies.
- Trade Facilitation: SEZs usually simplify import and export procedures, making it easier for businesses to import raw materials and export finished products. This can lead to increased international trade and investment.
- Infrastructure Development: Governments often invest in infrastructure within economic zones, including roads, ports, and utilities to support business activities. These infrastructure developments can enhance the attractiveness of these zones to investors.
- Job Creation: One of the primary goals of economic zones is to create jobs. By offering a favorable business environment, these zones can attract companies that are both large and small, which, in turn, hire local workers.
- Export Promotion: Many economic zones have a strong export-oriented focus. They encourage businesses to produce goods and services primarily for export markets, helping to boost a country’s exports.
- Diversification of the Economy: Economic zones can contribute to economic diversification by attracting a variety of industries. This reduces a country’s reliance on a single sector and creates more opportunities for income generation.
- Attracting Foreign Investment: Governments use SEZs as a tool to attract direct foreign investments. By offering an attractive business environment and incentives, they hope to bring in capital from abroad.
- Regional Development: Economic zones are often established in underdeveloped or strategically located regions to stimulate economic growth in those areas and reduce regional disparities.
Overall, the purpose of special economic zones is to ease business operations in hopes of improving the trade of goods and services and increasing revenue streams in areas of the country. And by investing in properties near SEZs, you contribute to community development and take advantage of the opportunities they present.
Why Invest in Properties Near Economic Zones?
While the benefits of special economic zones mostly cater to businesses, purchasing a house and lot for OFWs and young professionals in SEZs can prove to be beneficial. As first-time home buyers, buying a house is presumably your first big-ticket purchase. It’s only natural to feel like you want to get the bang for your buck and maximize opportunities in your new community.
That said, the advantages of investing in properties near economic zones are worth noting.
1. Economic Stability and Job Opportunities
Special economic zones are often associated with stability and growth. Businesses operating in these areas tend to be financially stable, creating a steady local economy and offering various job opportunities.
As homeowners living near an SEZ, you have the advantage of employment opportunities for yourself and your family members. This proximity to different employment prospects can enhance your overall quality of life with the promise of financial security.
2. Availability of Quality Products and Services
Economic zones often attract varying types of businesses including healthcare facilities, educational institutions, and various multinational corporations. As a homeowner, the importance of your property’s accessibility to these services and products can lead to more convenient living.
3. Increased Property Values
As economic zones tend to attract businesses and create jobs for residents in the community, property values in the vicinity often appreciate at a faster rate than in other areas. This can be beneficial to you in the long run especially if you decide to sell your property in the future. Increasing the value of your home can raise your asking price for potential buyers.
4. Higher Rental Rates
Properties located near economic zones are often sought-after by employees and businesses in the area because of their accessibility. So, if you’re a homeowner with the intent of having your property rented out in the future, you can leverage the increased demand for housing and implement higher rental rates from potential tenants.
5. Diverse Community
Economic zones attract a diverse workforce, creating a multicultural and dynamic community. This diversity can lead to a rich cultural experience and expanded opportunities for you to connect with people from various backgrounds.
6. Amenities and Recreation
Economic zones often foster the development of recreational facilities, parks, shopping centers, and entertainment options. These amenities can enhance your lifestyle and add to the amenities available within your vicinity.
7. Community Development
Economic zones may allocate resources for community development projects. Initiatives like improving public spaces, parks, and infrastructure can contribute to a more pleasant living environment.
The main benefit of buying a property near a special economic zone is the accessibility and development it offers to communities. Its other advantages simultaneously follow, creating more opportunities for both residents and businesses in the area.
A few of the more popular economic zones in the Philippines are the Clark Freeport Zone in Pampanga, the Subic Bay Freeport Zone in Zambales, and the Cebu IT Park in Cebu City. These locations generally offer specialized trades and services, contributing to the economic progress within the area.
For instance, the Clark Freeport Zone is commonly known for its aviation and logistics industries, while Cebu IT Park focuses more on Information Technology BPOs. In the southern area of Metro Manila, economic zones in Cavite like in Rosario and General Trias City have been established to encourage area advancement. This is why house and lots for sale in Cavite are gaining more attention from homebuyers.
The Things to Consider When Investing in Properties Near Economic Zones
As a homeowner investing in properties near SEZs, there are several important factors you need to take note of to make an informed and successful investment decision. Here are the key things to consider:
- Location Within the Economic Zone: The specific location of your prospective property within the economic zone can significantly impact its value and desirability. Homes closer to the core business area of the zone often command higher property values, which can ultimately affect your property’s appreciation.
- Infrastructure and Accessibility: Before you move in, evaluate the quality of infrastructure and transportation links in the vicinity. Check whether your community has good road access, public transportation options, and proximity to amenities that fit your lifestyle.
- Potential for Capital Appreciation: Research and identify the primary industries and businesses operating in the SEZ. Assess whether there are urban development plans and infrastructure projects likely to be built in the future. These factors can impact your property’s appreciation and the demand in your area.
While there are generally more factors to consider as you buy a property in economic zones, the ones listed are the important features you need to understand before finalizing your purchase. These considerations can turn into advantages if you evaluate them thoroughly before investing.
Moving Into Neighborhoods in Special Economic Zones with Minami Residences
Buying a new home in unfamiliar communities can be daunting especially if you have no idea where to start looking and which factors to consider. It’s important to have a reliable real estate partner that can help you purchase your dream home particularly if you’re moving into special economic zones.
Here at Minami Residences, we are your ideal real estate partner to help you find your dream home! Our premium Cavite house and lots are located in General Trias, an established SEZ in the greater Metro Manila area. Our community is easily accessible and surrounded by diverse amenities that can cater to your lifestyle. Take a virtual tour of our house models on our website or contact us to learn more!