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Property 'bubble' In Cebu - Your Views Please!


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Skywalker

This has recently been the subject of conversation, and I was wondering if anyone else here in Cebu has an opinion?

 

As we can see, there are a large number of 'high end' condo high rises being developed currently. There is a train of thought that the number of units being made available is likely to be greater than the number of local workers, in local jobs, that can sustain so many expensive apartments. To some extent this is alleviated by the 60/40 rule for foreign ownership.

 

As a foreigner who actually bought a 1 Bed unit 'off-plan' some 15 months ago, I am also interested to hear whether other foreigners (here in Cebu) have an opinion.

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It's not that the market is immune to forces. It's that filipinos are immune to logic.

You are communicating in the wrong place. You should be going into pubs all over the island with a shirt that details your proud investments, then you will are talk to folks that live or visit there a

what i invested was found money ,,, i made a lot of money in a short time with little effort so i spent it sure i could of cut here and downsized there but i did not i am of the mind that life is a hu

the.lone.gunman

I lived in Cebu for a year and looked around a bit at properties....i think Cebu is way over priced, but maybe it only seemed that way to me because I got the foreigner pricing.

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SkyMan

Pricing here seems to be set in stone. If you don't buy/rent it that's ok. We'll just let it sit empty (maybe years) until someone does. We prefer to get zero rather than take your 80 or 90% offer. We don't care what the going rate is.

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the.lone.gunman

Pricing here seems to be set in stone. If you don't buy/rent it that's ok. We'll just let it sit empty (maybe years) until someone does. We prefer to get zero rather than take your 80 or 90% offer. We don't care what the going rate is.

Bang on.....
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http://www.livingincebuforums.com/topic/45920-philippines-immune-from-normal-market-forces/

 

I made the above post in June 2010 asking about Cebu condo market and possibility of a "bubble". Then I followed up with another post a year later in 2011 asking why Philippines properties seem immune from normal world market forces. Now we are in 2012 there are others asking similar questions. Beats the heck out of me why things are the way they are in Philippines. But whatever forces are in play in Philippines seem like they will continue on and what is perceived as a bubble may not be a bubble at all. If there is to be a market correction it should have happened already (as it happened all over the world). I can cite many examples of why it makes no sense for the property market to be the way it is in Philippines but for whatever reason the Philippines market seems immune.

 

seaman

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mikejwoodnz

This has recently been the subject of conversation, and I was wondering if anyone else here in Cebu has an opinion?

 

As we can see, there are a large number of 'high end' condo high rises being developed currently. There is a train of thought that the number of units being made available is likely to be greater than the number of local workers, in local jobs, that can sustain so many expensive apartments. To some extent this is alleviated by the 60/40 rule for foreign ownership.

 

As a foreigner who actually bought a 1 Bed unit 'off-plan' some 15 months ago, I am also interested to hear whether other foreigners (here in Cebu) have an opinion.

 

Will the "Bubble" burst ? I don't think so - for sure the roading and infrastructure needs to improve to make the properties and their access more attractive - doubtlessly this will happen as these buildings collectively contribute to the rate and tax pool. I cannot see the next wave of buyers tolerating, for instance, the truly pathetic access like Winland Towers. The "Bubble" may wobble a little but there is plenty of room for the developers to move without cutting their building margins - finance for instance is way over the top and could move downwards to sustain asking prices. All properties appear to have an unlimited esculation clause built in (inflation proof on materials). Many of the units are delivered unfinished - again in a "wobble" the Developers could finish these to turnkey standards as a buying incentive. What alarmed me (as in put me off buying) XXXXXX(pm if needed) was the misquoted 6.9 M as 6 M - they refused to give me a copy of the prospective contract - my lawyer could come and "view" it but nothing was to leave the premises ! Mattfromnz is my witness ! The 2 bed finished and furnished unit as shown was to be delivered "raw" to enable me to employ their finishers and decorators to "finish" it to my taste - and of course for my additional cost ! They also tried to hussle me to sign a "deposit" agreement which they would finance at 12% compound - prior to signing the "contract" ! :baseballbat: (door locked - armed guard standing by - female CEO getting heavy - salesman sweating) :rofl: I said deliver me a contract complete with all terms and conditions to my Hotel - still waiting - although they did txt me this morning an invitation to their Cocktail Party this Friday.

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Reasons why prices may stay high here in Cebu.

 

One it isnt just Cebu. 100k /sqm seerms to be the same price as davao (after my 2 minute survey).

BKK is even more expensive.

dunno how much is concrete/steel costs - im sure these are increasing in price.

money from OFW is flowing in

plenty of new call center jobs

 

having said that, prices do seem very high in relation to average salaries in the region, though with 6% growth the market will catch up eventually. though when it does, i dont believe families will want the 20 sqm rabbit hutches being built just now, but thats another problem.

 

and as for the comment on preferring zero to 80% ..... lots of people do that all over the world, it most certianly isnt unique to the phils or to the residential sector or to the rental/buy market place. take a look at this: http://en.wikipedia.org/wiki/Harry_Hyams

 

and there are tens of thousands of empty appartments in Paris; owners just want to ride the increase in value and dont want the hassles of renting.

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smokey

Bang on.....

 

 

There are 3 magic words to this reasoning .....ITS PAID FOR

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senseless

I can cite many examples of why it makes no sense for the property market to be the way it is in Philippines but for whatever reason the Philippines market seems immune.

 

It's not that the market is immune to forces. It's that filipinos are immune to logic.

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smokey

It's not that the market is immune to forces. It's that filipinos are immune to logic.

 

 

 

well this site is not full of locals so i guess foreigners are also immune to logic...

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senseless

well this site is not full of locals so i guess foreigners are also immune to logic...

 

What?

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smokey

What?

 

 

 

Your using ameican logic lower the price because the payments are killing you ... well as the homes are already free and clean there is no bank breathing down your back and no interest to pay so why lower the price ... most bubbles are started when home prices rise and buyers dry up because they cant get a loan that is not the case in the philippines

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MarinePride

http://www.livinginc...-market-forces/

 

I made the above post in June 2010 asking about Cebu condo market and possibility of a "bubble". Then I followed up with another post a year later in 2011 asking why Philippines properties seem immune from normal world market forces. Now we are in 2012 there are others asking similar questions. Beats the heck out of me why things are the way they are in Philippines. But whatever forces are in play in Philippines seem like they will continue on and what is perceived as a bubble may not be a bubble at all. If there is to be a market correction it should have happened already (as it happened all over the world). I can cite many examples of why it makes no sense for the property market to be the way it is in Philippines but for whatever reason the Philippines market seems immune.

 

seaman

 

All bubbles pop, it's just a question of the timing, of which I don't have a clue. It seems that the whole developed world is in dire financial straits, fueled by years of ever increasing credit and spending. The problem here is that Filipinos who have lived overseas for decades are coming back here, as the USA collapses into itself, and they have money to spend for some new digs to live in. So they spend on something the seems upscale and trendy, which is the stuff being built and marketed. You cannot go to any mall, mini mall or whatever without having people shove a flyer at you advertising the stuff.

 

Hell, even here on Mactan island, there are people walking up to me, while I wait for my kid to get out of school, and giving me a flyer on the Mactan Newtown Center. Just for kicks, maybe I'll go a take a look and act like I'm remotely interested. Maybe they'll give me something for free......LOL!!.......just for looking.

 

I ain't spending top dollar for a place like that, when the second I step outside the premises I'm surrounded by the status quo.

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senseless

Your using ameican logic lower the price because the payments are killing you ... well as the homes are already free and clean there is no bank breathing down your back and no interest to pay so why lower the price ... most bubbles are started when home prices rise and buyers dry up because they cant get a loan that is not the case in the philippines

 

Nothing to do with the payments, it has to do with the value of land. They take 50-500peso a square meter land, hog it up (more than they're allowed under the constitution), then subdivide it at extreme prices. Then, those that offer houses build houses of low quality using low quality ingredients at double what it costs to build it with quality ingredients. The whole thing is a scam. The only thing they actually do for you (besides providing a homer owners association that will probably cut the throat of your dog, or throw it in a trash compactor, guards that sleep on the job and some low quality roads), is to give you a clean title.

 

But, if you want to go into the payments. Lets talk about all the filipinos who ignore logic, and get a 17% APY loan to pay for their house. That should be illegal. Or do you think it's ok that a person will pay 300-500% of the cost of their land/house in interest?

 

There's no logic on either side of the housing market here. It's just about who can feck over who the most (seems to be a common theme here).

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smokey

Nothing to do with the payments, it has to do with the value of land. They take 50-500peso a square meter land, hog it up (more than they're allowed under the constitution), then subdivide it at extreme prices. Then, those that offer houses build houses of low quality using low quality ingredients at double what it costs to build it with quality ingredients. The whole thing is a scam. The only thing they actually do for you (besides provided a homer owners association that will probably cut the throat of your dog, or throw it in a trash compactor, guards that sleep on the job and some low quality roads), is to give you a clean title.

 

But, if you want to go into the payments. Lets talk about all the filipinos who ignore logic, and get a 17% APY loan to pay for their house. That should be illegal. Or do you think it's ok that a person will pay 300-500% of the cost of their land/house in interest?

 

There's no logic on either side of the housing market here. It's just about who can feck over who the most.

 

 

and yet it works for them ... i have heard about the bubble that is going to burst for about 10 years and every year the prices go up its a game that you either play or you dont.... the reason houses are hard to sell here is the same reason the bubble never burst... cash is the way you buy and cash is the way you sell ... I just picked up a house in arizona for only 60,000 and its pretty new and was offered 3 % down this is what makes bubbles in cebu its pay or it dont happen if they ever open up the bank loans big time realestate will boom in cebu,

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