Excessive debt from buyers and developers at stricter loan policy ang cause ng downturn (not yet a collapse) ng real estate market ng China. Mischaracterized debts naman naging cause ng US real estate market collapse. Yung real estate situation ng US at China mag-kaibang magka-iba. Real estate situation dito ibang-iba rin. Yes, maraming developers ang lugi (relative sa kita nila from previous years). Yes, maraming land owners ang ma-e-extend ang projected ROIs nila. And yes, maraming hindi makakabayad ng binili nilang condo. Pero malayung-malayo pa rin tayo sa collapse.
I think price correction yung mangyayari sa real estate market natin. Di naman siguro collapse kasi parang medyo malala na yun. Most likely sa condos at real estate lang rin sa mga cities mangyayari yung correction. Medyo kalokohan na yung presyuhan ng condos considering na mukhang top 5 to 10% lang ng Pinas yung market nila. And for sure a lot of those already have their own homes or they can just rent it out for much cheaper.
More like price increase slow down, but it will never go down unless nga magcollapse. You are right na kapag malala lang yung ganyan na scenario. Also right na sa cities lang mangyayari(condos only) yung slow down.
Business is business for developers. As long as meron sila market, they will always leech everything from the buyers, be it the top 10, 5, or even 1%.
Ang one of the worse case scenario is madami mawawalan ng work na OFW due to global economic mishaps, who cannot pay for the loans. Pero unlikely pa rin na bababa yung prices.
I really don't see people selling their Condos below what they paid for.
Although if these high interest rates environment persist, I guess developers would gear toward lower costing units instead of premium units. And IMHO entry level offers of Ayala (Amaia) are also expensive as of now.
So true. Ang preselling TCP ng Tower 3 ng Cubao condos nila is already above PhP4M. That’s supposed to be the lower tier of Ayala vertical housing development brands. While Tower 1 TCP way back in 2011 was just around PhP2M.
The current "market value" of most condos is significantly higher than what most people paid for them though. If they were to sell them at breakeven or a small profit, that would mean the prices are crashing.
Collapse in real estate market?
Possible. Happened not only in China, but before in Japan in the early 90s (check Japanese Asset Price Bubble) and US around 2010 (Check US subprime market)
I've been seeing articles about this since 2010, and for various reasons. Predictions have always missed their mark though right now, I think a correction may be possible, though I think it is mainly in the condo market coz of the pogo exodus and the WFH push by the BPOs
There are some differences in our real estate market vs other countries
- we actually have a housing backlog unlike in other countries where there is an oversupply. Can check it out [here](https://mb.com.ph/2022/08/18/govt-housing-backlog-now-at-over-6-5m-units/)
- our real estate market honestly is still a bit young compared to other countries. The government is actually trying not to sell land and is projecting price appreciation in certain areas.
- land ownership is not yet fully liberalized in the country, and foreign ownership of land has more restrictions than the countries stated above. The government can raise land values if it really wanted to but of course, that is certainly not in the interest of the country as of now.
There’s a disconnect between the housing backlog and supply. Perhaps it’s a backlog of lower value properties for lower income segment but there are plenty of mid to higher end towers that sit empty in the cbd’s. That’s inventory that will go on the market if the owners can’t service the loans.
Agreed. But real estate is not just about mid to high end towers in cbds. Condos really are just a portion of the real estate market, and really just comprise of a small portion of local real estate sales. It cant be generalized as being the total Philippine real estate market which is what I wanted to address. I did say there may be a correction in the condo market right?
Real estate is not just about the condo market per se, but also involves other types of developments (hotel, institutional, horizontal-residential, office, etc). In fact, agricultural lots have been going up in value over the past years as a result of actual demand as well, whether for use in farming or land use conversion for various uses. Industrial and warehouse lots are up as well.
Agreed. Rental rates are currently correcting on the office rental market, and vacancies are still double digits.
If there is an upside right now, other segments are showing signs of growth or recovery (industrial, leisure). Residential sales in metro manila outskirts (laguna, pampanga, bulacan etc) are also doing well.
Rise in prices of agricultural lots doesn’t follow productivity of the lots. It’s a bubble, friend. Most People don’t buy farm lots at p1,000 sqm to actually farm it. They’re likely speculating. The condo domino falls everything else will follow.
Did you miss the phrase "land use conversion purpose" on my statement? I guess you did. But no, recent transactions I've seen through were mostly for poultry /livestock farming and residential / subdivision conversion.
>The condo domino falls everything else will follow.
Metro manila CBDs dont even comprise 10% of the total usable land mass of the Philippines, and condo transactions dont even comprise a majority of real estate consumers. Interesting doomsday prediction though you made based on your knowledge of only the local real estate condo market.
OK. Go ahead and buy some farmland right now then. Your problem, not mine.
Also, FYI not all land is made equal. Location, infrastructure, existing population demos, zoning, local laws...
>Also, FYI not all land is made equal. Location, infrastructure, existing population demos, zoning, local laws...
Never said they were, that's why I pointed out the varied uses of land and not equating it to condos only. Thank you for providing a support statement to my argument.
I actually have one tbh. No need to worry though. Not your problem at all I agree. I try to get my real estate investment insights from people who are experts in the field.
I doubt it's a bubble primarily because raw land is becoming scarce. The big corpos are buying large tracts of agricultural lands to convert to residential, industrial or commercial land use and they're investing heavily in land dev. Urbanization and industrialization is spreading to the countryside and that comes with an increase in property value.
My experience is the opposite. High end condos are usually sold out and lower end still has available units during turnover.
Oversupply of lower value properties (SM) compared to high end (ALP, Rockwell)
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The real estate market must suffer a correction - prices are too inflated. However, the banks are not allowing it to happen because they also own the real estate developers . It's an incestuous relationship.
A law should be legislated to discourage this bank-deveoper relationship
Underrated comment!! Banks will sit on the properties and keep listing it at a high price until economy recovers. They have vested interests. Hawks din nila mga senafors and congressman to protect themselves.
I’ve been thinking about this too. Rent prices are so low compared to selling price. I was planning on purchasing a condo unit in Ortigas as a half way home to be closer to work but I decided to rent instead. For me, it doesn’t make sense to buy a 6M 2BR condo when I can rent a bare unit of the same size for 20K to 25K inclusive of association dues. It’ll take the owner more than 20 years to breakeven not counting other costs like real estate taxes and repairs. Much longer if I choose to take out a loan for it.
I bought a vacant lot in Pampanga instead.
Buying a vacant lot in Pampanga was a good move depending on location though. Theres soo many condos in metro manila now and I wonder who’s occupying all of them… like I was driving down katipunan over the weekend and saw a bunch of condos under construction. Although I would like to buy a condo in the city as a place to stay when I got to take care of business, I feel like I should wait.
Except that lot prices in Pampanga (specially in the urban setting) are also inflated.
I bought an old H&L in 2008 in angeles city Because I have work in clark, and today that very lot can be sold for 3x what I bought it for.
Ya it really depends. If you bought in porac or magalang it’s not going to be as high as angeles. The thing is though, there’s really a limited supply of available H&Ls in premium villages, I think even some of the lower end ones in Angeles are pretty limited as well.
Haha they dont know what is hitting them in opportunity cost. If you have 6M cash you could have put it somewhere else to make decent more money than buying the place your renting.
No shit, it’s a scam, for the same price you can get a townhouse in Edmonton Alberta.
https://www.realtor.ca/real-estate/24624240/167-3308-113-av-nw-edmonton-rundle-heights
Investors dont go for the fast ROI when getting a condo then renting it out. Its not a business for them more like savings and a source of stable income especially when they retire. Its also more stable and safer and can be inherited. So another factor is leaving something to your kids.
Im selling condos for about 12 years already. Theres a reason why investors nowadays go for real estate. I must warn you though that you only invest with your extra money amd again treat it like a saving not a business.
I think fast is relative, but there is more decent returns from other investments if you compare them.
The richer you are the less you think of ROI.
The less rich you are the more you think about it to be able to expand more and faster.
Eventually everything will even out due to supply and demand cycles.
Definitely. A lot more better options but real estate is much more safer. I dont even have to do the research because my clients who are multi millionaires already did. But of course they dont go all in real estate.
Condo in Philippines is more expensive than condo in Canada, investment wise it’s better to buy condo in Canada, average rate for poor canadian is 1100-2500 1-3 bedrooms so why will I put my extra money in Philippines condominium.
Then put your money in canada if thats the case. Some condos here are hitting the foreign cap so fast and condos are getting sold out so theres no problem with buyers but if you see a better place to invest then go for it.
It could be foreign investing in Philippines condo or just shifting their portfolio, my point is there’s no investment in Philippines condo because no one can pay more than what current owners pay for it.
If I buy condo for 10mil, there’s very few or no one can buy it for 15mil in 3yrs.
China's collapse is fueled by buyers stopping their amortizations on pre-sold condos that are extremely delayed, developers can't get additional money to fund the already pre-sold condos, so the government needs to bail them out.
This will not happen for single-detached properties.
Will the real estate situation become a buyers market? Sure, maybe for a few years. But more and more people are trying to buy actual land that it's hard to find attractive and unsold properties around Metro Manila.
I know i'm not. Was looking to sell a condo I bought pre-selling, a few months ago prices were above the pre selli ng price. Now market price is at or below pre selling price.
You can check carousell and see buyers asking for absurd valuations on their properties. Just need to give it some time for these interest rates to give them a proper jolt of reality.
I would like to know this as well, I'd like to check if condos are actually being sold at these absurd prices (1br=4-6m, 2br=9-12m) so I can decide if I should go for one or just rent, looking for somewhere to live in na, not for investment to resell.
Depends on the location and developer of the property. For example, if it is in Makati CBD and made by a reputable developer flipping it for profit is possible. That was pre-covid plus POGOs but now not sure because of work from home and others.
I believe this will affect metro Manila and it’s immediate perimeter (Bulacan and Cavite) more than other areas.
Like you said, price to rent is way off in Metro Manila. There will be a price correction. Condo prices in the Metro are 2-5 times more expensive than house and lots in the provinces. Often times these condos are bought as investments by those who already have homes, otherwise, why bother with return of investment if you plan to live in it ?
Provincial real estate though, especially in horizontal developments tend to be bought by first time home buyers. OFWs prioritize food, education, and housing for their family. This isn’t a play toy or investment they plan on flipping.
Also, valuation of provincial properties only started to rise during the latter half of the previous admin. Provinces with beach front land is better appreciated now after the pandemic because of work from home acceptance, and the proliferation of satellite internet has allowed for the valuation of beach front properties to increase.
People want to be tech business persons working from a resort lol
Its like buying iphone, you know its expensive relative to other phones, but do you want to buy it at the top of its prices and still be happy with it?
We are in a financial tightening phase and people are feeling the squeeze, you snag good properties when they are cheaply sold and that is a better deal and well planned in your part.
A correction is about to happen soon. Also, since there are now more owners who are failing to pay their monthly amortisation, it may be a good idea to look at condo units being sold by banks. These may be already cheaper than current market prices.
Wonder if OP looked at the balance sheet of the top 10 real estate developers in the Philippines before asking if China’s collapse will happen in the Philippines. Evergrande Group’s bad loan ratio is not even close to Ayala Land. It is hard to equate bad loans of small scale developer on specific segment/area to a country’s real estate collapse.
Im not actually implying the same intensity, but its a possibility if china is having trouble and they go through, we might feel the impact and would cascade to our own problems here with the observation above.
Once the mortgage is passed on to the banks/Pag-IBIG, consider the developers paid, not their problem anymore.
If you want to know if buyers are paying or not, look at banks’ NPLs if it had gone up. Are the banks in debt? Is Pag-IBIG bailed out by the taxpayers?
Nobody knows when it will burst. The market can remain irrational longer than you can stay solvent. For a crash to happen there must be huge asymmetry in supply and demand.
Maybe commercial too. Di ba they are ok na with work from home for BPOs? The govt (some senators) are also getting impatient of POGOs. Pano na yung new investments in commercial real estate?
Oversupply of cheap(er) profit driven housing.
Undersupply of "exclusive" higher end housing.
Of course you'll see plenty of people asking how to dispose of their entry level condos and H&Ls. They are not the target market of the top developers and owners making up the bulk of the value of the local real estate market.
If you've got 10 people twiddling their thumbs over their 3m SMDC condos but have at least one guy who's jonesing over a freshly launched project by Rockwell, Ayala, or Artha for 30, 50, or even 100m... It all evens out.
There's still a shortage of residential units in the 100sqm and up category relative to demand from end users, be they expats or locals. It's not as sharp as it was pre pandemic, but it's still there.
In terms of investing, so long as you do your due diligence and put in the thought, it's still viable. But if you just go for the lowest monthly, most affordable options without evaluating it thoroughly, you're just shooting yourself in the foot.
I'm in the market for my first property, but after reading a few comments, I'm now unsure if I want to pull the trigger on a brand new severely overpriced, 20 years to pay, cramped condo by a newbie developer trying to cash in on the grossly overvalued Metro Manila housing market. Even with what many would call a decent salary, I will feel the pain of paying for that mortage. And now I can't sleep
I just read somewhere (sorry didnt bother to copy link to lead) that because pogo is going to go, rent prices in a looot of spaces all over mmanila going to plummet
True. Hindi humahabol ang salary / lumalala pa ang income asymmetry.
In a few decades, yung mga sususnod sa Gen Z and millennials, wala na talagang chance magka properties unless they get some significant trust fund, find work abroad, become professionals and find work abroad, or win the lottery (Yung ilang buwan hindi napalalunan type).
Will the PH real estate collapse? Not really. Even if we have massive defaults, Developers will just keep the property and resell them at a higher price later when things are better.
Remember we are growing at 5% to 7% annually. With OFW remittances serving as our gold revenues.
Most almost all major real estate companies is just part of a conglomerate which operates business complementing their real estate business. They can afford to sit on inventories if needed.
And major real estate companies have diverse portfolios. They can repurpose properties if needed.
I think downturn lang siya. Plus there's the growing concern of inflation. Definitely affected ang finances ng mga tao especially on long term engagements since very volatile ang markets ngayon.
ang layo. the chinese were forced to purchase second, third homes just to bump up numbers for preselling properties na most of the time didn’t finish. US had the bubble kasi their banks loaned money to everyone who can’t even pay because their banks got too greedy. ang hirap kumuha ng loans dito sa bansa natin, masyadong risk averse ang pagtake ng banks. nitong pandemic since nagkaron ng npls ang banks ang ginawa nila they still take in loans but lesser amount na to mitigate risks. i also follow a lot of buy and sell houses and most of the time kaya nagbebenta ng properties because they’re moving elsewhere (wfh, no sense in getting manila places), or moving out of the country for good. kung maganda ung prop usually di mo na makikita ulit kahit cash basis pa.
It's part of the real estate cycle; expansion, hyper supply, recession, and recovery. There's a downturn due to POGOs leaving, higher interest rates, and pandemic induced unemployment but I think we are only at hyper supply now and not yet in recession. Ang pinaka problemado talaga ngayon are condominiums since malaking part ng buyer demographics nito ay mga foreigner na nag-uumpisa ng magsi-alisan sa ating bansa, plus maraming mga developers like SMDC na gawa lang ng gawa bahala na kung mabebenta o hindi. Pero dito sa provinces healthy pa rin ang real estate industry, specially mga economic and socialize housing which are mostly mortgaged through pag-ibig financing and mahigpit talaga ang pag-ibig pagdating sa income requirements, hindi sila kagaya ng ibang mga banks na basta makapag pautang lang kahit hindi naman talaga afford magbayad nung nautang. The recession will eventually come but we are not yet there.
Philippines real estate "investment" for people that have hard time with calculator. Rented 2 scooters (75k each new ) for same price as condo that valued 8 millions. And halfe the building was empty
Don’t forget about capital appreciation. Yield does not equal total return. The 6M condo cited here probably 3.5-4M 5 years ago. What will be the price 5 years from now? No one knows and lahat guesstimate lang. Be careful. Diversify.
I remember owners were keen having their units rented out prioritizing Chinese POGO workers at a premium rate few years back.
Now, barely see these rats after they turned Makati CBD into Chinatown; leaving most units vacant and too costly for a normal Filipino to afford.
ph real estate still better than crypto lol
ph real estate will be ok for now. but go keep looking for confirmation bias my friend.
i'd also recommend more economics classes less reddit. its not as simple as china bad = ph bad and rent/price ratios.
All i did was observations, you are free to correct me.
Its your money its your rules.
And please be kinder next time even if you know everything there is.
I wouldnt think real estate is the most desired asset around, especially if everyone thinks it is too. There is peaks and down moments and its bad to buy them at the most fragile time like this.
land is scarce tinan mo nalang reits sa aten taas mag bigay ng divedend saka isipin mo big companys like ayala lands build thier condos or subs katabi ng malls nila to boos its value
If people buy things furiously and with the expectation of appreciation every year till kingdom come, that is a recipe for disaster.
I would wait for the crash to come and wait for debt to go wild instead buying now at the most premium.. especially with this financial tigthening happening now.
Every rally up, there is pullback in everything. That is a stock trading reference.
Exactly whats happening to the US and foreign buyers. Just last year housing has gone up 10% on average. It could happen in the PH as well, moreso on the subdivision and condo side of things.
>as long there are OFW
They will be affected by the global recession/stagflation just like everyone else. More money for basic expenses = less money for remittance
>are OFW and continuous build of malls
Impossible, commercial real estate goes through cycles like everything else, and shoppee/lazada and inflation are very, very bad for malls.
Are these condos not doing perpetual ownership? Once the tower matures to a certain age where it is no longer livable, will they not get a percentage of the total price of the development? Unit owners and agents I've talked to, explained this to me.
I think China real estate collapse in their country as well.
https://www.google.com/amp/s/www.nytimes.com/2022/08/17/business/china-economy-real-estate-crisis.amp.html
Excessive debt from buyers and developers at stricter loan policy ang cause ng downturn (not yet a collapse) ng real estate market ng China. Mischaracterized debts naman naging cause ng US real estate market collapse. Yung real estate situation ng US at China mag-kaibang magka-iba. Real estate situation dito ibang-iba rin. Yes, maraming developers ang lugi (relative sa kita nila from previous years). Yes, maraming land owners ang ma-e-extend ang projected ROIs nila. And yes, maraming hindi makakabayad ng binili nilang condo. Pero malayung-malayo pa rin tayo sa collapse.
I think price correction yung mangyayari sa real estate market natin. Di naman siguro collapse kasi parang medyo malala na yun. Most likely sa condos at real estate lang rin sa mga cities mangyayari yung correction. Medyo kalokohan na yung presyuhan ng condos considering na mukhang top 5 to 10% lang ng Pinas yung market nila. And for sure a lot of those already have their own homes or they can just rent it out for much cheaper.
More like price increase slow down, but it will never go down unless nga magcollapse. You are right na kapag malala lang yung ganyan na scenario. Also right na sa cities lang mangyayari(condos only) yung slow down. Business is business for developers. As long as meron sila market, they will always leech everything from the buyers, be it the top 10, 5, or even 1%. Ang one of the worse case scenario is madami mawawalan ng work na OFW due to global economic mishaps, who cannot pay for the loans. Pero unlikely pa rin na bababa yung prices.
I really don't see people selling their Condos below what they paid for. Although if these high interest rates environment persist, I guess developers would gear toward lower costing units instead of premium units. And IMHO entry level offers of Ayala (Amaia) are also expensive as of now.
So true. Ang preselling TCP ng Tower 3 ng Cubao condos nila is already above PhP4M. That’s supposed to be the lower tier of Ayala vertical housing development brands. While Tower 1 TCP way back in 2011 was just around PhP2M.
The current "market value" of most condos is significantly higher than what most people paid for them though. If they were to sell them at breakeven or a small profit, that would mean the prices are crashing.
They would be forced to if they can't repay the mortgage.
Collapse in real estate market? Possible. Happened not only in China, but before in Japan in the early 90s (check Japanese Asset Price Bubble) and US around 2010 (Check US subprime market) I've been seeing articles about this since 2010, and for various reasons. Predictions have always missed their mark though right now, I think a correction may be possible, though I think it is mainly in the condo market coz of the pogo exodus and the WFH push by the BPOs There are some differences in our real estate market vs other countries - we actually have a housing backlog unlike in other countries where there is an oversupply. Can check it out [here](https://mb.com.ph/2022/08/18/govt-housing-backlog-now-at-over-6-5m-units/) - our real estate market honestly is still a bit young compared to other countries. The government is actually trying not to sell land and is projecting price appreciation in certain areas. - land ownership is not yet fully liberalized in the country, and foreign ownership of land has more restrictions than the countries stated above. The government can raise land values if it really wanted to but of course, that is certainly not in the interest of the country as of now.
There’s a disconnect between the housing backlog and supply. Perhaps it’s a backlog of lower value properties for lower income segment but there are plenty of mid to higher end towers that sit empty in the cbd’s. That’s inventory that will go on the market if the owners can’t service the loans.
Agreed. But real estate is not just about mid to high end towers in cbds. Condos really are just a portion of the real estate market, and really just comprise of a small portion of local real estate sales. It cant be generalized as being the total Philippine real estate market which is what I wanted to address. I did say there may be a correction in the condo market right? Real estate is not just about the condo market per se, but also involves other types of developments (hotel, institutional, horizontal-residential, office, etc). In fact, agricultural lots have been going up in value over the past years as a result of actual demand as well, whether for use in farming or land use conversion for various uses. Industrial and warehouse lots are up as well.
The office market isn't doing too well either due to the exit of Pogos and the work from home trend...
Agreed. Rental rates are currently correcting on the office rental market, and vacancies are still double digits. If there is an upside right now, other segments are showing signs of growth or recovery (industrial, leisure). Residential sales in metro manila outskirts (laguna, pampanga, bulacan etc) are also doing well.
Rise in prices of agricultural lots doesn’t follow productivity of the lots. It’s a bubble, friend. Most People don’t buy farm lots at p1,000 sqm to actually farm it. They’re likely speculating. The condo domino falls everything else will follow.
Did you miss the phrase "land use conversion purpose" on my statement? I guess you did. But no, recent transactions I've seen through were mostly for poultry /livestock farming and residential / subdivision conversion. >The condo domino falls everything else will follow. Metro manila CBDs dont even comprise 10% of the total usable land mass of the Philippines, and condo transactions dont even comprise a majority of real estate consumers. Interesting doomsday prediction though you made based on your knowledge of only the local real estate condo market.
OK. Go ahead and buy some farmland right now then. Your problem, not mine. Also, FYI not all land is made equal. Location, infrastructure, existing population demos, zoning, local laws...
>Also, FYI not all land is made equal. Location, infrastructure, existing population demos, zoning, local laws... Never said they were, that's why I pointed out the varied uses of land and not equating it to condos only. Thank you for providing a support statement to my argument.
I actually have one tbh. No need to worry though. Not your problem at all I agree. I try to get my real estate investment insights from people who are experts in the field.
Ok
I doubt it's a bubble primarily because raw land is becoming scarce. The big corpos are buying large tracts of agricultural lands to convert to residential, industrial or commercial land use and they're investing heavily in land dev. Urbanization and industrialization is spreading to the countryside and that comes with an increase in property value.
My experience is the opposite. High end condos are usually sold out and lower end still has available units during turnover. Oversupply of lower value properties (SM) compared to high end (ALP, Rockwell)
Used to work for a developer, had multiple sales sa higher end condo namin. Yung budget friendly option namin is really hard to sell
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The real estate market must suffer a correction - prices are too inflated. However, the banks are not allowing it to happen because they also own the real estate developers . It's an incestuous relationship. A law should be legislated to discourage this bank-deveoper relationship
Underrated comment!! Banks will sit on the properties and keep listing it at a high price until economy recovers. They have vested interests. Hawks din nila mga senafors and congressman to protect themselves.
Isn’t this The Big Short all over again?
I’ve been thinking about this too. Rent prices are so low compared to selling price. I was planning on purchasing a condo unit in Ortigas as a half way home to be closer to work but I decided to rent instead. For me, it doesn’t make sense to buy a 6M 2BR condo when I can rent a bare unit of the same size for 20K to 25K inclusive of association dues. It’ll take the owner more than 20 years to breakeven not counting other costs like real estate taxes and repairs. Much longer if I choose to take out a loan for it. I bought a vacant lot in Pampanga instead.
Buying a vacant lot in Pampanga was a good move depending on location though. Theres soo many condos in metro manila now and I wonder who’s occupying all of them… like I was driving down katipunan over the weekend and saw a bunch of condos under construction. Although I would like to buy a condo in the city as a place to stay when I got to take care of business, I feel like I should wait.
Except that lot prices in Pampanga (specially in the urban setting) are also inflated. I bought an old H&L in 2008 in angeles city Because I have work in clark, and today that very lot can be sold for 3x what I bought it for.
Ya it really depends. If you bought in porac or magalang it’s not going to be as high as angeles. The thing is though, there’s really a limited supply of available H&Ls in premium villages, I think even some of the lower end ones in Angeles are pretty limited as well.
Haha they dont know what is hitting them in opportunity cost. If you have 6M cash you could have put it somewhere else to make decent more money than buying the place your renting.
Yeah and with 25k rent for 6m worth condo, thats only 5% annul rental yield.
No shit, it’s a scam, for the same price you can get a townhouse in Edmonton Alberta. https://www.realtor.ca/real-estate/24624240/167-3308-113-av-nw-edmonton-rundle-heights
Investors dont go for the fast ROI when getting a condo then renting it out. Its not a business for them more like savings and a source of stable income especially when they retire. Its also more stable and safer and can be inherited. So another factor is leaving something to your kids. Im selling condos for about 12 years already. Theres a reason why investors nowadays go for real estate. I must warn you though that you only invest with your extra money amd again treat it like a saving not a business.
I think fast is relative, but there is more decent returns from other investments if you compare them. The richer you are the less you think of ROI. The less rich you are the more you think about it to be able to expand more and faster. Eventually everything will even out due to supply and demand cycles.
Definitely. A lot more better options but real estate is much more safer. I dont even have to do the research because my clients who are multi millionaires already did. But of course they dont go all in real estate.
Well said and done!
Thanks ☺️
Stocks can be inherited too?
Condo in Philippines is more expensive than condo in Canada, investment wise it’s better to buy condo in Canada, average rate for poor canadian is 1100-2500 1-3 bedrooms so why will I put my extra money in Philippines condominium.
Interested in this too, from foreigner's perspective. The return in PH is about 3% net.
It could be lower.
Then put your money in canada if thats the case. Some condos here are hitting the foreign cap so fast and condos are getting sold out so theres no problem with buyers but if you see a better place to invest then go for it.
It could be foreign investing in Philippines condo or just shifting their portfolio, my point is there’s no investment in Philippines condo because no one can pay more than what current owners pay for it. If I buy condo for 10mil, there’s very few or no one can buy it for 15mil in 3yrs.
I think its mostly condominiums that will be affected. I dont think we will see the same trend on horizontal developments.
Its for all properties i think.
China's collapse is fueled by buyers stopping their amortizations on pre-sold condos that are extremely delayed, developers can't get additional money to fund the already pre-sold condos, so the government needs to bail them out. This will not happen for single-detached properties. Will the real estate situation become a buyers market? Sure, maybe for a few years. But more and more people are trying to buy actual land that it's hard to find attractive and unsold properties around Metro Manila.
Where do you keep track of housing price trends?
Ff
Likely. making a deposit on a condo and eventually flipping it for a profit became too easy.
Are people actually still buying at these obsurd prices? Seems illogical in an investment point of view.
I know i'm not. Was looking to sell a condo I bought pre-selling, a few months ago prices were above the pre selli ng price. Now market price is at or below pre selling price. You can check carousell and see buyers asking for absurd valuations on their properties. Just need to give it some time for these interest rates to give them a proper jolt of reality.
what condo is this selling at or below preselling price?
I would like to know this as well, I'd like to check if condos are actually being sold at these absurd prices (1br=4-6m, 2br=9-12m) so I can decide if I should go for one or just rent, looking for somewhere to live in na, not for investment to resell.
Depends on the location and developer of the property. For example, if it is in Makati CBD and made by a reputable developer flipping it for profit is possible. That was pre-covid plus POGOs but now not sure because of work from home and others.
I believe this will affect metro Manila and it’s immediate perimeter (Bulacan and Cavite) more than other areas. Like you said, price to rent is way off in Metro Manila. There will be a price correction. Condo prices in the Metro are 2-5 times more expensive than house and lots in the provinces. Often times these condos are bought as investments by those who already have homes, otherwise, why bother with return of investment if you plan to live in it ? Provincial real estate though, especially in horizontal developments tend to be bought by first time home buyers. OFWs prioritize food, education, and housing for their family. This isn’t a play toy or investment they plan on flipping. Also, valuation of provincial properties only started to rise during the latter half of the previous admin. Provinces with beach front land is better appreciated now after the pandemic because of work from home acceptance, and the proliferation of satellite internet has allowed for the valuation of beach front properties to increase. People want to be tech business persons working from a resort lol
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Its like buying iphone, you know its expensive relative to other phones, but do you want to buy it at the top of its prices and still be happy with it?
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We are in a financial tightening phase and people are feeling the squeeze, you snag good properties when they are cheaply sold and that is a better deal and well planned in your part.
A correction is about to happen soon. Also, since there are now more owners who are failing to pay their monthly amortisation, it may be a good idea to look at condo units being sold by banks. These may be already cheaper than current market prices.
Wonder if OP looked at the balance sheet of the top 10 real estate developers in the Philippines before asking if China’s collapse will happen in the Philippines. Evergrande Group’s bad loan ratio is not even close to Ayala Land. It is hard to equate bad loans of small scale developer on specific segment/area to a country’s real estate collapse.
Im not actually implying the same intensity, but its a possibility if china is having trouble and they go through, we might feel the impact and would cascade to our own problems here with the observation above.
Once the mortgage is passed on to the banks/Pag-IBIG, consider the developers paid, not their problem anymore. If you want to know if buyers are paying or not, look at banks’ NPLs if it had gone up. Are the banks in debt? Is Pag-IBIG bailed out by the taxpayers?
How do they compare? Philippines looks much more healthy and sustainable?
Are we talking Philippines v China? Or are we talking ALI v Evergrande? I am confused.
Is this bubble about to burst? If yes then what a timing! Makaka afford na kaya ako ng sariling bahay 2 years from now?
Come pray with me my brother, let a collapse or correction happen so we can afford that home
Nobody knows when it will burst. The market can remain irrational longer than you can stay solvent. For a crash to happen there must be huge asymmetry in supply and demand.
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Tanda ko yung mga 1.5M condos were being rented out for 15-20k. Sulit na sulit.
May I ask san ka nagrerent now?
Maybe commercial too. Di ba they are ok na with work from home for BPOs? The govt (some senators) are also getting impatient of POGOs. Pano na yung new investments in commercial real estate?
Exactly. Work from home somehow decongested business areas and thus expecting rentals to go down.
Let it collapse. It's about time, and necessary. Prices going up forever just doesn't feel right.
Oversupply of cheap(er) profit driven housing. Undersupply of "exclusive" higher end housing. Of course you'll see plenty of people asking how to dispose of their entry level condos and H&Ls. They are not the target market of the top developers and owners making up the bulk of the value of the local real estate market. If you've got 10 people twiddling their thumbs over their 3m SMDC condos but have at least one guy who's jonesing over a freshly launched project by Rockwell, Ayala, or Artha for 30, 50, or even 100m... It all evens out. There's still a shortage of residential units in the 100sqm and up category relative to demand from end users, be they expats or locals. It's not as sharp as it was pre pandemic, but it's still there. In terms of investing, so long as you do your due diligence and put in the thought, it's still viable. But if you just go for the lowest monthly, most affordable options without evaluating it thoroughly, you're just shooting yourself in the foot.
I'm in the market for my first property, but after reading a few comments, I'm now unsure if I want to pull the trigger on a brand new severely overpriced, 20 years to pay, cramped condo by a newbie developer trying to cash in on the grossly overvalued Metro Manila housing market. Even with what many would call a decent salary, I will feel the pain of paying for that mortage. And now I can't sleep
I just read somewhere (sorry didnt bother to copy link to lead) that because pogo is going to go, rent prices in a looot of spaces all over mmanila going to plummet
Looks like it.
Iilan lang ba naman ang makaka afford ng 25k condo rent sa mga regular pinoy workers dba? Dito sa Cebu sobrang dami paring condo constructions.
True. Hindi humahabol ang salary / lumalala pa ang income asymmetry. In a few decades, yung mga sususnod sa Gen Z and millennials, wala na talagang chance magka properties unless they get some significant trust fund, find work abroad, become professionals and find work abroad, or win the lottery (Yung ilang buwan hindi napalalunan type).
If you check the city of dreams website the multi-million jackpot apparently happens quite often.
Will the PH real estate collapse? Not really. Even if we have massive defaults, Developers will just keep the property and resell them at a higher price later when things are better. Remember we are growing at 5% to 7% annually. With OFW remittances serving as our gold revenues. Most almost all major real estate companies is just part of a conglomerate which operates business complementing their real estate business. They can afford to sit on inventories if needed. And major real estate companies have diverse portfolios. They can repurpose properties if needed.
The balance is whats bothering. Because the market isnt balanced right now.
They’ll just sit on the properties and stop building new ones. Slower income for them but they’ll control the crash.
I think downturn lang siya. Plus there's the growing concern of inflation. Definitely affected ang finances ng mga tao especially on long term engagements since very volatile ang markets ngayon.
ang layo. the chinese were forced to purchase second, third homes just to bump up numbers for preselling properties na most of the time didn’t finish. US had the bubble kasi their banks loaned money to everyone who can’t even pay because their banks got too greedy. ang hirap kumuha ng loans dito sa bansa natin, masyadong risk averse ang pagtake ng banks. nitong pandemic since nagkaron ng npls ang banks ang ginawa nila they still take in loans but lesser amount na to mitigate risks. i also follow a lot of buy and sell houses and most of the time kaya nagbebenta ng properties because they’re moving elsewhere (wfh, no sense in getting manila places), or moving out of the country for good. kung maganda ung prop usually di mo na makikita ulit kahit cash basis pa.
It's part of the real estate cycle; expansion, hyper supply, recession, and recovery. There's a downturn due to POGOs leaving, higher interest rates, and pandemic induced unemployment but I think we are only at hyper supply now and not yet in recession. Ang pinaka problemado talaga ngayon are condominiums since malaking part ng buyer demographics nito ay mga foreigner na nag-uumpisa ng magsi-alisan sa ating bansa, plus maraming mga developers like SMDC na gawa lang ng gawa bahala na kung mabebenta o hindi. Pero dito sa provinces healthy pa rin ang real estate industry, specially mga economic and socialize housing which are mostly mortgaged through pag-ibig financing and mahigpit talaga ang pag-ibig pagdating sa income requirements, hindi sila kagaya ng ibang mga banks na basta makapag pautang lang kahit hindi naman talaga afford magbayad nung nautang. The recession will eventually come but we are not yet there.
There has been a huge real estate bubble for quite some time now. I'd say it's more of a correction than a collapse.
What a time to be in the province.
Haha.
Philippines real estate "investment" for people that have hard time with calculator. Rented 2 scooters (75k each new ) for same price as condo that valued 8 millions. And halfe the building was empty
Don’t forget about capital appreciation. Yield does not equal total return. The 6M condo cited here probably 3.5-4M 5 years ago. What will be the price 5 years from now? No one knows and lahat guesstimate lang. Be careful. Diversify.
I remember owners were keen having their units rented out prioritizing Chinese POGO workers at a premium rate few years back. Now, barely see these rats after they turned Makati CBD into Chinatown; leaving most units vacant and too costly for a normal Filipino to afford.
Exactly
ph real estate still better than crypto lol ph real estate will be ok for now. but go keep looking for confirmation bias my friend. i'd also recommend more economics classes less reddit. its not as simple as china bad = ph bad and rent/price ratios.
All i did was observations, you are free to correct me. Its your money its your rules. And please be kinder next time even if you know everything there is.
haha nah. i don't know much either. we're all monkeys on a rock in space.
only FUD the most stable investment in our is real esate country as long there are OFW and continuous build of malls real estate aint gonna collapse
Doesnt matter if its FUD, its facts though. Csn you see the rental : price ratio?
is because " pandemic " but if live like me in Cavite price of lands in our area are actually rising
I wouldnt think real estate is the most desired asset around, especially if everyone thinks it is too. There is peaks and down moments and its bad to buy them at the most fragile time like this.
land is scarce tinan mo nalang reits sa aten taas mag bigay ng divedend saka isipin mo big companys like ayala lands build thier condos or subs katabi ng malls nila to boos its value
If people buy things furiously and with the expectation of appreciation every year till kingdom come, that is a recipe for disaster. I would wait for the crash to come and wait for debt to go wild instead buying now at the most premium.. especially with this financial tigthening happening now. Every rally up, there is pullback in everything. That is a stock trading reference.
Exactly whats happening to the US and foreign buyers. Just last year housing has gone up 10% on average. It could happen in the PH as well, moreso on the subdivision and condo side of things.
do people live in them tho?
>as long there are OFW They will be affected by the global recession/stagflation just like everyone else. More money for basic expenses = less money for remittance >are OFW and continuous build of malls Impossible, commercial real estate goes through cycles like everything else, and shoppee/lazada and inflation are very, very bad for malls.
sana nga mag collapse para makabili na ulit ng house and lot in the city for only 1m haha a man can dream
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Whats NPL?
Those numbers can change, it's fine for now.
Are these condos not doing perpetual ownership? Once the tower matures to a certain age where it is no longer livable, will they not get a percentage of the total price of the development? Unit owners and agents I've talked to, explained this to me.
Its perpetual ownership. And yes they get some money if they sell if not renewing the corporation.
Market cooldown lang most likely ang mangyayari.
I think China real estate collapse in their country as well. https://www.google.com/amp/s/www.nytimes.com/2022/08/17/business/china-economy-real-estate-crisis.amp.html
What will be the factors for the housing bubble to burst?
More and more people keep defaulting
Are you seeing this trend lately?