Real Estate and Housing Industry

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Real Estate on the Rise By Cielito Habito
Inquirer
Last updated 05:47pm (Mla time) 05/06/2007

http://business.inquirer.net/money/c...ticle_id=64401

MANILA, Philippines -- UNTIL early last year, communications, particularly telecommunications services, was the single fastest-growing industry within the services sector. In my economic briefings, I liked to say that the Filipinos' love affair with text messaging was driving the Philippine economy, and that wasn't too much of an exaggeration then.

New leader

Well, not anymore. In the past three quarters, growth in communications had slowed down to single-digit levels, after enjoying rapid double-digit growth over much of the past decade. Whether this is a long term trend is too early to tell, but at the moment, real estate and property development has dislodged communications as the growth leader in the services sector.

In the fourth quarter of last year, the real property sector posted a hefty 22.7-percent growth in real terms--now the highest-growing sub-sector within services. In the quarter previous to that, the growth rate was 26.2 percent. Against an average real growth rate of 16 percent in 2004 and 2005, real estate growth appears to be picking up lately. It has come to a point that renewed worries are now being heard that a real property bubble similar to what led to the 1997 Asian financial crisis may be looming.

A notable indicator is the recent upsurge in real property loans being granted by the Philippine banking system. Ten years ago, the Bangko Sentral ng Pilipinas (BSP) saw it fit to impose limits on the real property lending of banks. Is it time to revisit those limits again?

BPO-driven

What is driving the recent growth in the real estate sector? There is much casual evidence pointing to the surge in office space demands from the call center industry, and from the business process outsourcing (BPO) sector in general, as a primary source of the growth. Indeed, non-factor services exports, which prominently include BPOs, grew by a whopping 36 percent last year.

We hear of the tight office space market in the Ortigas and Makati areas, for example, where call centers and other BPOs are snapping up office spaces faster than they can be built. And this is an industry that is not confined to Metro Manila, either. Major centers around the country are seeing a similar boom in these types of businesses, that include backroom accounting, medical and legal transcription, graphic and architectural design, animation, research and a number of others.

There is an interesting sidelight here: the "research" part of it includes the not-so-honest business of made-to-order term papers and thesis manuscripts for lazy students overseas--a business, I hear from a friend who is actually into it, that has a large and growing market. For decades, this "cottage industry" for manufactured or recycled research papers had been known to students to be thriving in the Claro M. Recto Avenue area in Manila. Guess what: the industry has now gone global--thanks to Internet search engines like Google and Yahoo! coupled with computer cut-and-paste technology, which make it very easy to come up with a credible term paper in whatever subject you can think of, within minutes.

Housing demand

Adding to the BPO office space demand is the persistent unmet demand for housing, especially in the low- to medium-income segment. While the market for high-end condominium housing units appears to have tapered, growing numbers of Filipino families are in need of homes. The demand from OFW families is particularly on the rise, with anecdotal evidence pointing to a growing portion of remittances now going into housing investments. Property developers are taking heed, including those that traditionally focused on the higher end of the market. The big names in the industry have increasingly gone into housing development projects targeted at this rapidly growing market segment.

Helping this trend is the current environment of low interest rates, which has made housing finance much more accessible than before. For this we have the improved government fiscal situation and surging money supplies worldwide to thank. Banks no longer see it as attractive to lend to the government as before, via investments in government securities and treasury bills whose yields are now much lower.

No bubble

At the same time, demand for bank loans from the traditional corporate borrowers has slowed down, with deepening capital markets and expanded financing options. Thus, the banks have turned to consumer financing in a big way--including home and auto financing--which is good news to the housing industry. Adding to all this is the growing demand for property development from the retirement estate industry, spurred by aging populations in rich countries. And then there are the shopping malls sprouting out all over, thanks again in large part to consumer purchasing power fueled by OFW money.

All these tell me that the recent surge in real estate development is not quite the same as the bubble that led to the 1997 collapse. It appears that brisk growth in the sector could be around for a while--and this is good news for the Philippine economy.

[-TC-]

An older article...

Central Bank Allays Fears of a Repeat of ’97 Crisis
Real demand, not speculation, fuels property boom
By Michelle Remo
Inquirer
Last updated 03:31am (Mla time) 04/28/2007

http://business.inquirer.net/money/t...ticle_id=62959

MANILA, Philippines -- The central bank, Bangko Sentral ng Pilipinas (BSP), is allaying fears that the current real estate boom could be a prelude to another financial crisis similar to that experienced in 1997 by Southeast Asian countries, including the Philippines.

BSP Governor Amando Tetangco Jr. told reporters: “If one looks at the real property market now, the increase in lending to the sector is driven by actual demand. It is different from what happened in 1997, when the increase in property prices was due to speculative activities.”

Tetangco said that in 1997 many people were driven into buying real estate to make profits, on speculation that prices would go up.

The late-1990s drop in real estate prices led to losses by banks with heavy exposure in the property sector. The resulting weak demand for real estate left banks with large non-performing assets.

In today’s case, Tetangco said, the increase in demand for real estate is largely due to demand among families of overseas Filipino workers (OFWs).

“Their first priority is education of their children, and then investment in properties,” he noted. “The OFW market is now a major market as far as developers are concerned.”

The BSP earlier reported that the thrift banking industry’s investment and loan exposure in the real estate sector grew 26 percent to P76.06 billion at end-December 2006 from a year earlier.

Bankers say low interest rates encourage individuals and corporations alike to buy real estate for personal use or business expansion.

Corporations that have waited on the sidelines for the right time to expand have started pursuing their plans to take advantage of the record-low interest rates, bankers say.

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And another...

OFW Remittances, BPO Sector and Local Developments Sustain Real Estate Boom
Karla A. Vizcarra
Mar 21, 2007
http://www.philippinenews.com/news/v...dfe29c379a89ce

MANILA — Developers continue to capitalize on the country’s upward trends in the real estate sector, as Philippine political, economic and social factors remain favorable, approximating a boom not seen since the 1997 Asian Crisis.

For the period of January to November 2006, selling licenses approved by the Housing and Land Regulatory Board (HLURB) registered a 25% increase to 343,758 units from 274,230 units submitted by developers in the same period last year as various property segments posted growth. Registration was strongest in the third quarter with 133,341 units lodged with the HLURB – up by nearly 100% from 2006. Units referred to are either residential and/or commercial.

Colliers International Philippines reports a drop in vacancy rates of residential condominium units in the Makati CBD from 10% in the last quarter of 2006 to 8.1% in January of this year. Rents in the area are up by nearly 54% from its lowest point in 2003.

Colliers predicts rents to approximate pre-1997 crisis levels by the end of this year.

Senate President Manny Villar, dubbed “the dean of the (Philippine) real estate industry,” himself declared in an October 2006 article, “We are now in a real-estate boom. I’m very bullish that this time, it will be stronger and longer-lasting than the one we enjoyed in the nineties.”

Various developers pertain to the boom-and-bust cycle as indicative of trend longevity. National Real Estate Association President Alejandro Manalac estimates this current cycle’s head to have come up near the end of 2002, after a slump that lasted from 1997 to early 2002.

“I’ve seen 2 cycles,” Manalac said. “But the market is subjective. From the vantage point of the developers, industry was down from 1997 to 2002. But this was the time when the dollar surged from P26.50 (in 1997) to P56. So as the dollar got stronger, so did low cost housing developments. OFWs suddenly found themselves easily paying cash for house and lots. For them, those were the heydays.”

The OFW market has since matured into a driving force of Philippine economy, accounting for a substantial portion of the current boom.

Rockwell Land’s Vice President of Business Development Ninalyn Cordero asserted how launching the Manansala residential towers in the U.S. paid off debts incurred in the ‘97 crisis. She placed Rockwell’s latest buyers at a 50-50 ratio: 50 % overseas buyer, 50% local market. “The pick-up is due to other factors as well. Our political situation is quite stable. The Filipinos finally realized that there’s no better alternative. On the economic side, interest rates are at an all-time low. Money has never been this cheap.” She said.

November 2006 data from the Bangko Sentral ng Pilipinas (BSP) show that loans extended by commercial banks to the real estate sector had risen 5.6% in the second quarter of 2006, from the 0.6% drop posted the previous year

“Now we’re talking about 8-9 % interest rates for long term money. There is a lot of market liquidity. The banks have addressed their non-performing assets. It’s all these things coming into play.” Ms. Cordero noted.

New San Jose Builders, a property development group since the 1980’s, has recently veered from contracting government projects for Pag-Ibig members to building affordable condominium units. VP for International Sales & Marketing Cristia Bonifacio-Lin declared their sales reached the P1B mark last December, 35 to 50% of which is credited to OFWs. “The trend of buying is all based in the culture of ownership, the Filipino value of securing the family.” She said.

The BPO sector is an equally aggressive player in real estate, plunging CBD vacancy rates down to 4% from the previous quarter’s 5%, as reported by Colliers.

Office space absorption in the area was recorded at 93,660 square meters – up by nearly 15% from 81,829 square meters in 2005. Vacancy rates are predicted to drop further to less than 3% by the end of 2007.

As industry leaders anticipate the biggest property boom for the Philippines in nearly three decades, some groups like United Nations Economic and Social Commission for Asia and the Pacific warn a possible repeat of the financial crisis that beset the region 10 years ago. With most units slated for completion in the next year, property consultants and researchers are looking at a slowdown in residential sales. Others fear the ballooning and eventual bursting of an asset bubble, caused by the ongoing supply of residential and commercial space. Asset bubble refers to inflated asset value or the price of stocks or property increasing at an unwarranted pace. Still others talk of possible market saturation.

Mr. Manalac said that today’s conditions are very different from the previous cycles. “Then we were only depending on the domestic market, made up of local Chinese businessmen. It was a fixed market with a lot of players: big, small and sometimes unscrupulous. When the smoke cleared after the crash, only the big boys were left standing. Now, there are fewer players, but they are bigger and more credible. There are more quality projects too, not just stand alone ones. Now we have community, concept and lifestyle projects.”

Along with a growing retirees market, he cited the strength of local spending power and developments on the local front. “If you look at it closely, we have to give credit to what’s happening in the Philippines--- places like Greenbelt, the Fort, and Ortigas. Because even if you have that huge foreign market abroad, if there’s no attraction to come here, why will invest?”

Ms. Cordero acknowledged some other cyclical concerns, stating that the industry may be on its 4th or 5th year. “Usually it’s in the range of five to ten years, although there are more investments coming in now, which strongly indicate a longer trend. A lot of developers have learned from the crisis, they had their pains, I think they will be more deliberate and cautious. Barring any political downturns, we should be okay.”

There are now 400 developers registered with the HLURB within the Quezon City area; 188 in Manila and 190 in Makati as of 2004.

[-TC-]

As an intro to this new thread I created…

We’ve read so much about the real estate boom in the Philippines… it’s all over the papers and the news. We’re witnessing it first hand with all the construction going on around us. We’ve fed into it by buying our own houses/condos in the past few months or years. Even by simply getting our very own Philippine subforum in SSC with several new u/c threads being started is a fine testament to this happy development for all of us and our country. It’s all good.

So without spoiling the party (I don't mean to), I hope to find some honest answers from all of you to the questions below:

1) How has the Philippines and the average Filipino taken advantage of this boom?
2) How many years more will this last?
3) Are you prepared for the eventuality that this cycle will end a few or more years from now? What will you do then?


You may add more questions so we can have a free-flowing intelligent (not emotional ha ) discussion here. Thanks.

[Retro]

Originally Posted by tcchua

As an intro to this new thread I created…

1) How has the Philippines and the average Filipino taken advantage of this boom?
2) How many years more will this last?
3) Are you prepared for the eventuality that this cycle will end a few or more years from now? What will you do then?

Hi,

Your posting is so appealing not to reply.. here's my comment.

I say the development of outsourcing business has a big factor in building up the real estate industry again. Its the main catalyst why investor & bank got interest on it. My estimate this would last around 3-5 years time starting 2 years ago and once the BPO available space is filled up this will would somehow flatten real estate demand.

On the other hand the volume of OFW investment in purchasing new home came a big factor also in continuing the real estate boom. According to what I've heard there are two types of OFW investing in new property. The first one are OFW concentrated in Middle East w/c normally prefer house & lot while the 2nd one are OFW outside Middle East such as North America, Europe. This 2nd type prefer condo investment.

The 3rd possible factor that help in pushing up the demand are those baby boomer FilAm that would be coming back to Philippines for their retirement. However, at the moment this group might be tricky to consider since the property in the State is somehow getting competitive enough for them due to downturn of real estate business in US. Meaning more home & property are being sell below the standard market price.

At the moment the continued stability of banking interest rate some how help both the developer and local buyer in such away the cost of building material and monthly amortization more stable and affordable for local buyer.

Well I hope that this industry should take a more conservative approach not to overcook everything by charging to high as to what they sell so that the momentum could still continue.

[laquacherra]

considering that a majority of the projects that are currently in their preselling stage are expected to be completed in 2009/2010... let's all keep our fingers crossed and hope that this boom cycle will last a few more years

[-TC-]

Originally Posted by laquacherra

considering that a majority of the projects that are currently in their preselling stage are expected to be completed in 2009/2010... let's all keep our fingers crossed and hope that this boom cycle will last a few more years

I'm just wondering... does anyone here have a list of the turnover dates of all the projects listed in our u/c thread? That'll be interesting to see.

[lazybum]

Originally Posted by tcchua

As an intro to this new thread I created…

We’ve read so much about the real estate boom in the Philippines… it’s all over the papers and the news. We’re witnessing it first hand with all the construction going on around us. We’ve fed into it by buying our own houses/condos in the past few months or years. Even by simply getting our very own Philippine subforum in SSC with several new u/c threads being started is a fine testament to this happy development for all of us and our country. It’s all good.

So without spoiling the party (I don't mean to), I hope to find some honest answers from all of you to the questions below:

1) How has the Philippines and the average Filipino taken advantage of this boom?
2) How many years more will this last?
3) Are you prepared for the eventuality that this cycle will end a few or more years from now? What will you do then?


You may add more questions so we can have a free-flowing intelligent (not emotional ha ) discussion here. Thanks.

Does anybody on this board know where I can obtain historical and current regional commercial and residential real estate market data? I would like to subscribe if they are available (preferably on-line). Thanks in advance.

[-TC-]

Originally Posted by lazybum

Does anybody on this board know where I can obtain historical and current regional commercial and residential real estate market data? I would like to subscribe if they are available (preferably on-line). Thanks in advance.

@lazybum... you need regional data? You can go to www.colliers.com, click on the specific country you like, download the research report (e.g. HK Property Market Overview, Asia Pacific Office Market Overview, etc.). There are lots of stuff. You may also subscribe to their newsletters or reports and receive these in your inbox when they become available.

[queetz@home]

I agree and the key to a sustainable real estate boom is to not over do the hype. As a recent example, prior to the previous real estate bust, the hype of developers was to get into ultra high end. The success of the first buildings of the Rockwell Centre led other developers to go ultra high end, resulting in huge ambitions projects like Roxas Triangle, Essensa, Pacific Plaza, and so on. Developers built so much high end condo units, more than the market can take. Thus corrective action, reinforced by the Erap crisis, busted the high end real estate boom at that time. Although it has recovered somewhat, thanks in the large part to PGMA's positive economic reforms, the non-existence of Roxas Triangle Two is a testament of that dark era in Philippine Real Estate.

Right now, the hype is almost entirely on the OFWs. While the market for them is quite large and strong, developers will have to realize that OFWs are just as vunerable as anyone when it comes to economic shock. The strong Philippine peso is already a hurting factor, plus the complex real estate tax laws here (as per Taftrader's post in the Real Estate Taxes thread). A little sneeze in the US economy here, a little quarrel in the Middle East there, a hint of impeachment here, and the demand from OFWs can drop dramatically. So its best to not over price them to the point of unsustainability and also be price sensitive to the growing middle class of the local market as a potential source of buyers. Like in any product market, diversity is the key to sustainable success....

[-TC-]

http://www.philstar.com/index.php?p=...ec=27&aid=2776

OFW Remittances Drive Growth of Property Sector
By Des Ferriols

Friday, May 18, 2007

Monetary officials said demand from overseas Filipino workers (OFWs) is driving the growth in the property sector.

Despite the growing nervousness elsewhere in the region, the Bangko Sentral ng Pilipinas (BSP) said the country’s property boom is largely financed by OFW money and is therefore more stable and sustainable.

BSP Governor Amando M. Tetangco Jr. said unlike in 1997 when people were buying up property with the intention to sell, this boom is being fueled by the housing sector as OFW families acquire residential properties for their own use.

“The OFW market is driving a significant portion of the property sector right now,” Tetangco said.

“OFWs do not borrow from banks, they finance their acquisition with their own income.”

As a result, Tetangco said the growth in lending to the housing sector has not been as fast as the growth in the sector itself, with the real estate exposure of banks growing only moderately.

“This is what differentiates this growth from the pre-1997 period,” he said.

In terms of lending, Tetangco said property developers and related industries often borrow from banks to finance their activities but since the end-market was a self-financed and steady market, the basis for expansion was more stable.

“It’s understandable to be somewhat nervous but the situation this time is qualitatively different,” he said.

The BSP had earlier said there were no indications that the current boom in the property sector was a bubble that could burst, saying that current levels were far from the point where they could lead to another financial crisis.

The fresh surge in the property sector had created initial worries that asset prices are leading towards an asset bubble that should be monitored and even stabilized by monetary officials

According to Tetangco the idea has been floated in the international financial community that monetary officials should start monitoring asset prices and considering their levels when setting monetary policies.

Tetangco said the BSP has conducted its own study and determined that although stock prices and indices have recovered close to pre-1997 levels, there were no indications that this could create another problem similar to the aftermath of the Asian contagion.

“Asset prices become a concern only when they begin to affect inflationary expectations and create demand-side pressures as a result of wealth creation,” Tetangco said. “We are not even close to that point.”

According to Tetangco, BSP studies have indicated that although there was a build up in land values recently, the levels were still below pre-1997 levels and were driven by economic activity more than market exuberance.

Right now, the BSP said that although the market was approaching pre-1997 levels in property sales and lending, the current average land values were a long way from values at the onset of the Asian crisis.

[Retro]

Wow, I say our fellow countrymen who is working abroad really our modern day heroes. Imagine even the property sector they are helping them to grow

[-TC-]

Originally Posted by Retro

Wow, I say our fellow countrymen who is working abroad really our modern day heroes. Imagine even the property sector they are helping them to grow

And don't forget to thank the BPO industry, tourists and possibly the retirees as well...

http://business.inquirer.net/money/b...ticle_id=66589

Retirees seen becoming another major economic force
By Doris Dumlao
Inquirer
Last updated 03:22am (Mla time) 05/18/2007

MANILA, Philippines -- The spending power of Filipino retirees is expected to expand by 4.4 percent annually in the next 10 years to reach $6.8 billion in 2015, aided by cash remitted by relatives working overseas, a regional study said.

Financial support for the elderly in the Philippines is dependent on extended family units, as social security coverage remains small, Yuwa Hedrick-Wong, an economic adviser to Mastercard International, noted in a recent publication titled, “The Glittering Silver Market: The Rise of the Elderly Consumers in Asia.”

But the Filipino elderly are supported financially by the unique overseas Filipino worker (OFW) phenomenon, Hedrick-Wong said.

“The majority of these overseas workers leave behind their spouses and young children,” he noted. “In many instances, both parents work overseas, leaving the young children at home,” creating a situation in which the grandparents and sometimes the granduncles and grandaunts serve as surrogate parents for OFW children.

“And, for the elderly themselves, their role as surrogate parents enables the parents to seek work abroad. It may not be ideal, but in many ways this is a win-win situation for the elderly, the overseas workers and the children left behind,” Hedrick-Wong said.

As of 2005, the total spending power of retired empty nesters and retired old singles was estimated at $4.4 billion, the study said. The average spending power was about $1,350 per person for retired empty nesters and $1,230 for retired old singles, it said.

“The spending power is split quite evenly between the retired empty nesters (or those whose adult children have left their homes to live elsewhere) and the retired old singles, with the spending power of the former growing at a slightly higher annual rate of 4.8 percent, compared with 3.9 percent for the latter,” it added.

The study noted a wide discrepancy between the elderly in the rural and urban areas, with those based in Metro Manila being more dynamic.

Among the five discretionary expenditure items, spending on dining and entertainment was found to be the biggest in 2005, accounting for 60 percent of total. Shopping came in second, accounting for 26 percent. Purchases of vehicles, personal computers and mobile phones ranked third.

“The expected growth rates of these key discretionary expenditure items are very uneven in the next 10 years. Spending on travel and leisure activities is expected to grow the fastest at an average of over 10 percent a year,” Hedrick-Wong said.

Spending on shopping, on the other hand, was expected to grow the slowest at 0.9 percent per year.

“These five discretionary items will grow collectively at an average of 7.8 percent per year in the coming decade, bringing the total discretionary expenditure to almost $2 billion in 2015,” he said.

Across the region, Mastercard president for Asia-Pacific, Middle East and

Africa Andre Sekulic said, the lengthening of individual life expectancy would make the elderly a dynamic driver of the consumer market.

“The silver market of elderly consumers is set to glitter in Asia Pacific. The reward is expected to be great when businesses get it right,” Sekulic said.

In affluent Asia-Pacific countries and territories -- Japan, South Korea, Taiwan, Hong Kong, Singapore and Australia -- the total potential spending by the elderly households was estimated at $868 billion in 2005, and is expected to rise to $1.5 trillion in 2015.

In emerging Asia -- consisting of China, India, Thailand, Malaysia and the Philippines -- total spending of elderly households was estimated at $153 billion in 2005, and is projected to rise to $430 billion in 2015.

[jonno]

Originally Posted by queetz@home

I agree and the key to a sustainable real estate boom is to not over do the hype. As a recent example, prior to the previous real estate bust, the hype of developers was to get into ultra high end. The success of the first buildings of the Rockwell Centre led other developers to go ultra high end, resulting in huge ambitions projects like Roxas Triangle, Essensa, Pacific Plaza, and so on. Developers built so much high end condo units, more than the market can take. Thus corrective action, reinforced by the Erap crisis, busted the high end real estate boom at that time. Although it has recovered somewhat, thanks in the large part to PGMA's positive economic reforms, the non-existence of Roxas Triangle Two is a testament of that dark era in Philippine Real Estate.

Right now, the hype is almost entirely on the OFWs. While the market for them is quite large and strong, developers will have to realize that OFWs are just as vunerable as anyone when it comes to economic shock. The strong Philippine peso is already a hurting factor, plus the complex real estate tax laws here (as per Taftrader's post in the Real Estate Taxes thread). A little sneeze in the US economy here, a little quarrel in the Middle East there, a hint of impeachment here, and the demand from OFWs can drop dramatically. So its best to not over price them to the point of unsustainability and also be price sensitive to the growing middle class of the local market as a potential source of buyers. Like in any product market, diversity is the key to sustainable success....

1)Erap crisis??? The last property boom in the Philippines I know was in 97 which was disrupted by the Asian Financial crisis thou not as severe as many other Asian economies.

2)The "sneeze" in the US economy that you're referring to is I think happening right now and as you could see does not really affect us since we have now more ties with Chinese, South Korean capital.

3)There will be no impeachment thou there may be a slight possibilty of a coup by those who would want to be as popular as Trillanes

4)I don't think we should regulate prices at all; let the market forces prevail. What we should do is have a stricter regulation in pre-sell; for example we could require all real estate companies to have the projects at least 30% complete before they pre-sell; this would not only offer more protection to buyers, it would also lessen unnecessary over supply.

5.)Yes diversity is very important, also we should amend our constitution and "open" our economy big time so instead of relying only on our OWF's, we'll have more investors. By the way, OFW remittances now are much bigger than 97, furthermore while the slump in the US property market could entice investors (because it's cheap there) it could also discourage them. Real estate prices in the Philippines is still a bargain esp. with signs of a much healthier economic growth. There is so much room for growth in the Philippines; one of the best places to put your money is here.

[jonno]

Originally Posted by jonno

1)Erap crisis??? The last property boom in the Philippines I know was in 97 which was disrupted by the Asian Financial crisis thou not as severe as many other Asian economies.

2)The "sneeze" in the US economy that you're referring to is I think happening right now and as you could see does not really affect us since we have now more ties with Chinese, South Korean capital.

3)There will be no impeachment thou there may be a slight possibilty of a coup by those who would want to be as popular as Trillanes

4)I don't think we should regulate prices at all; let the market forces prevail. What we should do is have a stricter regulation in pre-sell; for example we could require all real estate companies to have the projects at least 30% complete before they pre-sell; this would not only offer more protection to buyers, it would also lessen unnecessary over supply.

5.)Yes diversity is very important, also we should amend our constitution and "open" our economy big time so instead of relying only on our OWF's, we'll have more investors. By the way, OFW remittances now are much bigger than 97, furthermore while the slump in the US property market could entice investors (because it's cheap there) it could also discourage them. Real estate prices in the Philippines is still a bargain esp. with signs of a much healthier economic growth. There is so much room for growth in the Philippines; one of the best places to put your money is here.

In addition:

6.) Our population is growing exponentially; growth in the past few years is different from the growht in the next few years

7.) BPO factor. There was no significant BPO industry in 97 whereas there is a rapidly growing BPO industry now

[queetz@home]

Originally Posted by jonno

1)Erap crisis??? The last property boom in the Philippines I know was in 97 which was disrupted by the Asian Financial crisis thou not as severe as many other Asian economies.

2)The "sneeze" in the US economy that you're referring to is I think happening right now and as you could see does not really affect us since we have now more ties with Chinese, South Korean capital.

3)There will be no impeachment thou there may be a slight possibilty of a coup by those who would want to be as popular as Trillanes

4)I don't think we should regulate prices at all; let the market forces prevail. What we should do is have a stricter regulation in pre-sell; for example we could require all real estate companies to have the projects at least 30% complete before they pre-sell; this would not only offer more protection to buyers, it would also lessen unnecessary over supply.

5.)Yes diversity is very important, also we should amend our constitution and "open" our economy big time so instead of relying only on our OWF's, we'll have more investors. By the way, OFW remittances now are much bigger than 97, furthermore while the slump in the US property market could entice investors (because it's cheap there) it could also discourage them. Real estate prices in the Philippines is still a bargain esp. with signs of a much healthier economic growth. There is so much room for growth in the Philippines; one of the best places to put your money is here.

I never said anything about regulation but I think the marketing departments shouldn't over price condo units like crazy which seems to be happening nowadays. And this isn't just selling price but payment terms as well. Fortunately, some companies such as Megaworld do have excellent payment schemes that allow local buyers to participate but there are still a lot of developers that expect people to pay high five to six digit monthly payment schemes and yet their projects aren't THAT high end.

As for the ERAP crisis, yes the Philippines weren't affect as much, which is why its an ERAP crisis. The Philippines was practically shielded against the Asian crisis because of President Ramos's leadership and when the crisis was subsiding, only then did the Philippine real estate really collapsed! Note that PhilamLife Tower, for example, manage to be very profitable since that building has been pre-leased just before Erap came to power. Other projects, including the defunct Westmont Bank, World Commerce Plaza and Jaka Tower, weren't so fortunate.

Oh, and a coup can be as damaging, or even worse, than impeachment. Asia World went under because of the 1987 coup. God knows what will go under if Trillianes causes trouble. Kingdom Hotels? PSE moving to BGC (AGAIN!!!)?

As for reliance to the US economy, we do rely on it both in trade and in OFW remittances quite heavily. Those BPOs....where do you think they mostly cater to? All it takes is a shift in power in the US to favour protectionist agendas to kill the BPOs (i.e. those anti-outsourcing groups who think such jobs should remain in the US). The US elections in 2008 is something to watch out for very carefully.

[jonno]

Originally Posted by queetz@home

I never said anything about regulation but I think the marketing departments shouldn't over price condo units like crazy which seems to be happening nowadays. And this isn't just selling price but payment terms as well. Fortunately, some companies such as Megaworld do have excellent payment schemes that allow local buyers to participate but there are still a lot of developers that expect people to pay high five to six digit monthly payment schemes and yet their projects aren't THAT high end.

As for the ERAP crisis, yes the Philippines weren't affect as much, which is why its an ERAP crisis. The Philippines was practically shielded against the Asian crisis because of President Ramos's leadership and when the crisis was subsiding, only then did the Philippine real estate really collapsed! Note that PhilamLife Tower, for example, manage to be very profitable since that building has been pre-leased just before Erap came to power. Other projects, including the defunct Westmont Bank, World Commerce Plaza and Jaka Tower, weren't so fortunate.

Oh, and a coup can be as damaging, or even worse, than impeachment. Asia World went under because of the 1987 coup. God knows what will go under if Trillianes causes trouble. Kingdom Hotels? PSE moving to BGC (AGAIN!!!)?

As for reliance to the US economy, we do rely on it both in trade and in OFW remittances quite heavily. Those BPOs....where do you think they mostly cater to? All it takes is a shift in power in the US to favour protectionist agendas to kill the BPOs (i.e. those anti-outsourcing groups who think such jobs should remain in the US). The US elections in 2008 is something to watch out for very carefully.

Thanks, you made a lot of really good points there. A protectionist policy would indeed hurt our BPO industry big time. My instinct tells me (influenced by my political economy background in uni) protectionism if it does occur would come about in the form of trade blocks, say NAFTA for the US and their neighboring countries and of course EU for Europe but this would likely to happen only in the event of a major worlwide recession or depression. Yes, it's possible that a bit of protectionism could also happen after the 2008 elections in the US but I kind of doubt it since it's going to seriously affect the US' competitiveness but it's possible to varying extent.

[Retro]

Looking at those information share in this forum, I would say that project that would finish beyond 2010 would be consider a buyers risk. If one doesnt chose the project and developer very well. Is there any protection we could have in case developer would be default in delivering and completing their project?

[queetz@home]

Yeah, no kidding, eh? Who knows what happens at 2009 onwards so I hope no body causes trouble in the foreseeable future to cut the boom short...

[jonno]

Originally Posted by queetz@home

Yeah, no kidding, eh? Who knows what happens at 2009 onwards so I hope no body causes trouble in the foreseeable future to cut the boom short...

Well the goods news is unlike in the past, none of the 2010 presidentiables are anti business who would likely resort to populist policies, this is of course assuming we don't shift to a parliamentary in which case we'll have a Prime Minister.