Jump to content

Property 'bubble' In Cebu - Your Views Please!


Recommended Posts

senseless

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

 

They pray on OFWs knowing that they will never be able to afford cash payments. It's really criminal.

 

Ya, of course a foreigner buys land/house with cash. No other way to do it, because we have the super power of basic math.

  • Like 1
Link to post
Share on other sites
  • Replies 67
  • Created
  • Last Reply

Top Posters In This Topic

  • smokey

    15

  • Skywalker

    7

  • senseless

    6

  • For Real

    4

Top Posters In This Topic

Popular Posts

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

smokey

They pray on OFWs knowing that they will never be able to afford cash payments. It's really criminal.

 

Ya, of course a foreigner buys land/house with cash. No other way to do it, because we have the super power of basic math.

 

 

 

i bet if i could sell my house with 10% and 30 years to pay there would be a line to buy it... but the banks have been stung so often there is no way most condo projects are in house payments... many are sold out before the foundation is finished like a run away train you climb on or you let it pass you

Link to post
Share on other sites
senseless

i bet if i could sell my house with 10% and 30 years to pay there would be a line to buy it... but the banks have been stung so often there is no way most condo projects are in house payments... many are sold out before the foundation is finished like a run away train you climb on or you let it pass you

 

Even 10% is high. It's just crazy to go for anything more than like 2-4% on a long term loan like that.

 

You should check out some of the foreclosure listings online. The banks have started just putting them right on their sites. Some of the banks have more listings than you could shake a fist at. It's just like the US, people have a great job, get a house they can't afford, lose their job, and end up homeless. But, I'm also seeing huge sections of subdivision land that were foreclosed on; 10 or 20 lots in the same subdivision.

Edited by senseless
Link to post
Share on other sites
mikejwoodnz

Even 10% is high. It's just crazy to go for anything more than like 2-4% on a long term loan like that.

 

You should check out some of the foreclosure listings online. The banks have started just putting them right on their sites. Some of the banks have more listings than you could shake a fist at. It's just like the US, people have a great job, get a house they can't afford, lose their job, and end up homeless. But, I'm also seeing huge sections of subdivision land that were foreclosed on; 10 or 20 lots in the same subdivision.

Yes but the same logic prevails there - the Philippine banks won't accept anything less than the original price plus the default interest and penalties - the condition of the property is "as is" - with the presumption of perfection :banghead: They will however refinance it at the original price plus the default interest and penalties ! :yahoo:

Edited by mikejwoodnz
Link to post
Share on other sites

I bought my house 5 years ago and identical houses on the same sub division are now priced at +50%. However, they are not selling and I do think there is a serious problem. There is an obvious over supply of available property. For those whose purchase depends upon money earned overseas (us and OFWs) the rise in value of the peso is hurting badly. Combine the rise in the asking price with the decline in the exchange rate I would have to find more than twice the money I did 5 years ago to buy this house. As most folk have less money available, and not more, this is bound to have an effect, especially at the top end of the market.

 

I am not sure this is understood at all by the developers who continue to churn out the homes without any regard to current and predicted market conditions.

Link to post
Share on other sites
ILoveCyrus

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.

 

Haha....so true and so stupid. Why is that? These Pinoys are kinda crazy that way............

Link to post
Share on other sites
ILoveCyrus

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....iki/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.

 

Thanks Sperry...........that is interesting

Link to post
Share on other sites
ILoveCyrus

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.

 

We're in Pajac, Lapu Lapu....where are you bro?

Link to post
Share on other sites
WONINTWO
the developers who continue

 

You are correct and the reason they can do this is because they are so cheap to build.I see these POS ratt holes selling for P1.2Million($29,200)and they are total rat hole POS made with the shitty-est materials available.A downpayment is P25,000 and then the poor slob Filipino who buys his 'dream house' ends up paying $110,000(P5.5million) over the next 30 yrs.(if he doesn't lose his job and get foreclosed on OR the POS doesn't just fall down,LOL!!!)and it only cost the developer $8,000 to build the hunk of shit.The wiring burns out the first month the foundation cracks within 3-4 months and the roof starts to leak within 1 year(I rented an OFW's house that was rented w/out the OFW knowing,I am pretty sure the 'caretaker' put the cash in her pocket,and what I just stated happened,ALL in one month!!!).If there is a warranty good luck trying to get it honored.The 'Big Boys ' who build the POS have it figured to the exact centavo how much they are going to make on each unit and will NEVER settle for a peso less and the banks also know how much they are going to make and the bankers here are the same as the builders + they are tight as shit,never take anything less than a sure thing,never take a loss or a risk.The prices are not coming down,the places are just going to steadily become vacant except for those who go in CA$H/no mortgage and they are the ones who will end up with the high HOA's($100 is high here).The roads will not get fixed either w/the tax base expanding,HA tha is a laugh!, it is just more PESO'S for the politicians.People who live here seem to be OK w/a nice place being located right next to the squatters area's shit-holes...BUT NOT ME!!!!.

 

I know what I am doing....I AM GETTING THE feck OUT OF HERE,to the SOUTH-WESTERN USA.much better deals,all the way around,living conditions,healthcare etc,etc...places there look like mansions compared to the places here that are selling for the same price,LMAO!!!

Link to post
Share on other sites

Back in 2000, when we were down in Cebu, a friend of the wife (real estate agent) got us thinking about getting our own place. We went around Mactan looking at a few places then she suggested a place in Consolacion owned by an OFW owner who wanted to sell. Cost was 700,000, I forget the actual size of the place but man was it small!! I'm not a big guy but there wasn't enough space inside to swing a cat. The bedroom was just big enough for the bed and little else and the bathroom??? I couldn't stand up straight as I would hit my head on the ceiling. We told them we would think about it.

 

A year later we bought a piece of land, 198sqm and built on it. We spent less than 700,000 including the land and it is a palace compared to the one we saw.

 

This was what a group of Filipinos did here in Bahrain sometime ago:- they bought a big piece of land, had it surveyed, planned and subdivided with roads and utilities, got all the necessary permits, got an architect to churn out 3 building plans (small, standard and 'upscale'), made a deal with a contractor, worked out an installment payment plan, designed some brochures and posters and started advertising and selling. Other than building a compound wall they didn't have to build anything else - the money for the roads, etc comes from the buyer.

 

I think they invested about 3 million pesos in total and the estimated income was to be fantastic considering that they were pricing each house from 1 million upwards.

 

After all, it is everyone's dream to have their own place and the average buyer finds it more affordable on a monthly installment than on a full payment.

Link to post
Share on other sites
easy44

I see things changing in the next couple of years. Condos are being built at a rate unprecedented in Cebu. Many of the initial pre-construction offerings are snapped up by speculators who only put a deposit down, expecting to resell them at a profit before the construction is completed. They could safely do this when only a few projects were on the books every year, but that is not the case now. Eventually some of these will start to fall through because there won't be enough buyers to soak up the demand. That's when the bubble starts to burst. Even now I am starting to see incentives being offered by developers through ads in the newspaper. That has not happened before.

Link to post
Share on other sites
Davaoeno

You are correct and the reason they can do this is because they are so cheap to build.I see these POS ratt holes selling for P1.2Million($29,200)and they are total rat hole POS made with the shitty-est materials available.A downpayment is P25,000 and then the poor slob Filipino who buys his 'dream house' ends up paying $110,000(P5.5million) over the next 30 yrs.(if he doesn't lose his job and get foreclosed on OR the POS doesn't just fall down,LOL!!!)and it only cost the developer $8,000 to build the hunk of shit.The wiring burns out the first month the foundation cracks within 3-4 months and the roof starts to leak within 1 year(I rented an OFW's house that was rented w/out the OFW knowing,I am pretty sure the 'caretaker' put the cash in her pocket,and what I just stated happened,ALL in one month!!!).If there is a warranty good luck trying to get it honored.The 'Big Boys ' who build the POS have it figured to the exact centavo how much they are going to make on each unit and will NEVER settle for a peso less and the banks also know how much they are going to make and the bankers here are the same as the builders + they are tight as shit,never take anything less than a sure thing,never take a loss or a risk.The prices are not coming down,the places are just going to steadily become vacant except for those who go in CA$H/no mortgage and they are the ones who will end up with the high HOA's($100 is high here).The roads will not get fixed either w/the tax base expanding,HA tha is a laugh!, it is just more PESO'S for the politicians.People who live here seem to be OK w/a nice place being located right next to the squatters area's shit-holes...BUT NOT ME!!!!.

 

I know what I am doing....I AM GETTING THE feck OUT OF HERE,to the SOUTH-WESTERN USA.much better deals,all the way around,living conditions,healthcare etc,etc...places there look like mansions compared to the places here that are selling for the same price,LMAO!!!

 

 

Bye !!

  • Like 2
Link to post
Share on other sites
Jim in Cebu

Here's my two centavos....

 

The only residential real estate sector which I don't think is at risk of eventually crashing is the low-end, low cost housing (say, p1.5M and below). There is a great demand for this kind of housing and it is still "affordable" to a sizable segment of the population (typically, OFW, call-center, or foreign-relative based.)

 

The other residential real estate sectors are much more susceptible to a bubble since property prices have/are increasing exponentially while family incomes are only increasing incrementally. The growing gap between affordability and property values undermines the sustainability of the the current market boom.

 

Despite this fundamental problem, the market values may not crash in a fashion similar to the US. Instead, as it has been pointed out, the properties may remain vacant for years before they are sold. Eventually, wage inflation will make them marketable again at today's pricing some time in the distant future.

 

Another point that has been made by others that I agree with is that many homeowners purchase property at prices that they can barely afford to cover during their present "good times". It doesn't take much of a cash flow hit to cause them to default on their loans and lose their property. In this regard, they are like many Americans that are over-extended.

Link to post
Share on other sites
Brucewayne

I bought my house 5 years ago and identical houses on the same sub division are now priced at +50%. However, they are not selling and I do think there is a serious problem. There is an obvious over supply of available property. For those whose purchase depends upon money earned overseas (us and OFWs) the rise in value of the peso is hurting badly. Combine the rise in the asking price with the decline in the exchange rate I would have to find more than twice the money I did 5 years ago to buy this house. As most folk have less money available, and not more, this is bound to have an effect, especially at the top end of the market.

 

I am not sure this is understood at all by the developers who continue to churn out the homes without any regard to current and predicted market conditions.

 

 

As I have stated before, the developers have the job of convincing investors to invest in the buildings and don't give a damn that the places will never be lived in.

Tons of rentals in Cebu City now for P10,000-P20,000 that were P25,000-P60,000 just 5-6 short years ago.

  • Like 1
Link to post
Share on other sites
For Real

They pray on OFWs knowing that they will never be able to afford cash payments. It's really criminal.

 

Ya, of course a foreigner buys land/house with cash. No other way to do it, because we have the super power of basic math.

That's what happens in the encumbered housing market & OFW's are regularly fleeced by banks & developers - go into any B or C grade subdivision and take a look at the growing delinquents lists. Its interesting that there is an influx of foreclosure listings - when the mortgagee sales start getting to the top of their S curve I will likely buy some property in the Philippines for my family.

 

I will buy off the banks at the fair market price, I certainly don't plan to acquire a fully (over)paid up property off an i don't want the dream to end seller.

 

Its hard to not to fathom with even the most rudimentary analysis that the vast majority of homes in the area making up greater Cebu are under finance, and not the "I don't need or want the dream to end" owners.

 

The I don't need or want the dream to end" sellers will continue to buy back their own homes at fantasy rates till they need the cash or die-translation - they only make up a portion of the market

Link to post
Share on other sites
Guest
This topic is now closed to further replies.

×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use, Privacy Policy and Guidelines. We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue..