Buoyed by relatively lower prices and a red-hot economy, luxury properties in the Philippines are increasingly becoming attractive to buyers from China and Hong Kong, according to a report published in Global Property Guide.

Prices of prime Philippine properties are significantly below those of comparable properties in Indonesia and Thailand, said property developer Marco Biggiogero on a new residential resort development dubbed Aqua Boracay by yoo in touristy Boracay.

He added,

This offers considerable scope for capital growth and represents great value.

According to Biggiogero, more than half of the units in the first phase of their project have been sold to Hong Kong investors. The branded, completely furnished apartments costs about $3,500 per sqm and are guaranteeing a minimum 6 percent annual return for the first two years.

Julius Guevarra, associate director of Colliers International Philippines, also said that prime properties in the business district Makati City such as apartments in the newly opened Raffles Residences were snapped up by Hong Kong and mainland Chinese investors. The apartments occupy the 11th to the 30th floors of a complex that also houses the 278-room Fairmont Hotel and an exclusive 30-suite Raffles Hotel on the 9th and 10th floors.

Guevarra said the luxury units in the upscale Raffles Residences cost as much as Php40 million ($979,680) in a market where the average price is only about Php7 million ($171,444).

Why the Philippines

Curbs implemented in Hong Kong and China to control their red-hot property markets have made it difficult for investors to profit from real estate, said Guevarra. Hence, many of these buyers saw themselves investing in more relaxed markets within the region, such the Philippines.

In addition, Philippine real estate presents better yields for rental properties, along the region of 6% to 8% a year, while prices are on a gradual growth driven mainly by inflation and not on market speculation. The Philippines is also one of the few countries in Asia that posted decent economic growth in 2012, while its stock market rallied approximately 20% so far this year.

While Chinese buyers are just starting to scratch the surface of the Philippines’ prime property market, many of them are also looking at related investment opportunities, such as the country’s booming tourism sector and China’s very mobile moneyed class.

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