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Will the earthquakes cool the buying and rental market?


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Brucewayne

But isn't it also true that 100% of highrises are still fine after the strongest earthquake ever recorded in this area. All buildings that collapsed are one/two story buildings. In addition some old historical buildings, road and bridges were badly damaged.

 

http://en.wikipedia.org/wiki/List_of_earthquakes_in_the_Philippines

 

Not entirely true, 100% is a big guestimate as many high rises sustained damages and several members here listed their damages on this site.

Still standing, yes, fine, not so much.

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Well to give you the heads up from my side, we have got 4 clients wanting to move out of condos this last week, pretty scary Tuesday morning especially for some that live in older condo blocks. As far

But isn't it also true that 100% of highrises are still fine after the strongest earthquake ever recorded in this area. All buildings that collapsed are one/two story buildings. In addition some old h

This whole country is long over due for a property decrease/bubble pop. I actually get very concerned when a country where 80% live on less then 2 dollars a day look at condo;s being built and sold f

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Monsoon

The market will cool, but the bulk of sellers  / landlords won't accept it and hold at above market demands. 

 

Desperation sales will always continue and are really the only way to buy land in the Philippines. Just worked on  a 200 php/ sqm deal on a nice parcel where 1500+ php/sqm is common and it is not earthquake related... So what is 'value'?  What someone is willing to pay for something. This deal started at 500 php/sqm... 

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Value is what people are willing to pay. Most bubble are when peopl eforget or don't know that eventually you'll run out of people who'll be willing to pay that much.

 

Tech.coms 80's, futures market in the 20"s, housing just recently. started in 70 got boost in 80's / 90's stated to crash last 2007.

 

Overextend. Was once said if you took 5 $100 usd bills ($500) stacked them one atop the other and put them on the ground, that is what it would cost to buy the amount of land in Tokyo.

 

I just bought a 150 sqm 2 brm, 2 full bath,  6 rm quad  w/ garage, patio, and 4 season sun room (single story condo / 4 to joined together) for my wife for $102,000 (4,800,00php) that sold for $180,000 (7,200,000 php) in 2007

 

People in US are starting to buy again.

 

Cigarettes are not a good example because they are addictive - in Chicago taxes are $7.20 a PACK $72 USD for a carton of 10.

Edited by lamoe
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Davaoeno

 

 

5 $100 usd bills ($2,500)

 

In Canada 5 $100 bills only gets you $500.   I like the US system much better .

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Sorry

 

fat fingered number

 

old brain fart

 

was using using new Core math - 1 x 5 = 500 (but had 5 x on brain so wrote 2,500) - would be correct under new program?

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In Canada 5 $100 bills only gets you $500.   I like the US system ($2500) much better .

The $2500 figure for the US system is correct.  It's the amount that the People's Government ends up owing the Federal Reserve "Bank" after 5 new $100 bills are "created" and released into circulation.

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smokey

I don't think you understand what a bubble is and banks are only one fo the victims of said bubble, not always part of the cause as you seem to believe.

A bubble is simply created when the quantity or price of something becomes so high that buyers dry up, therefore, the bubble pops.

That is where nobody builds and investors, buyers, suppliers and all related services dry up, because the market "popped" like a bubble, no more growth.

In this case the price will have to be drastically reduced to entice someone to buy and that is where hard sell has to come in.

There are a lot more people here using the hard sell technique than there were a few years ago, it works on some people, but I get pissed when anyone tries to pressure me into a deal.

well then there has always been a bubble and always will be....i think the kind of price cuts your looking for is when everyone at the same time tries to leave town like in the walking dead... how can i have a bubble if my house is paid for ... screw the banks ,, paid for means no interest rate hikes.. no rise in payments.. i can wait till jesus comes as that goes for almost all the homeowners... your looking massive price cuts and that just is not going to happen...

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LastManStanding

Unfortunately the massive sub divisions they are/ and having been building in Lapu Lapu are mostly townhouse style Deca homes subdivisions.  If you look at Deca 4 or 5.  There must be thousands of homes in each subdivision.  Bayswater also put in 800 homes.  Most of those are all financed in house with crazy interest rates.  The condo situation is an entirely different beast in my opinion.  I think alot of the units are held by Chinese Filipino who believe that they can rent out the units while the valuations elevate to levels near New York and Hong Kong.  However I see them mimicking more like Bangkok, where they rose then oversupply, crash, decade later, rise again if the condo didn't fail or the location is no longer desirable.

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Knowdafish

 The same can be said for the Philippines, it is known as the paradise for hillbillies, not the ultra rich.

 

I would venture to guess that the amount of people that go to the Philippines versus Haiti though is exponentially different. 

 

There are a few extremely expensive world class resorts in the Philippines that are frequented by the "ultra rich". I can't say this about Haiti. 

 

http://www.amanresorts.com/amanpulo/resort.aspx

 

The "ultra rich" will continue to come to the Philippines even after the earthquake. The top resorts will not be lowering their prices either. 

Edited by Knowdafish
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Headshot

Did the earthquake affect values in the housing market and how will values be affected, if so? I'm guessing there are as many answers as there are properties.

 

Let's look at the earthquake and aftershocks first. It is very likely that this was the "big one" for this region of the Philippines. The aftershocks have not just been on the fault that produced the earthquake, but have been on numerous fault lines on Bohol, under the Bohol Straits, and even on Cebu. That is good news...because it means that the overall tensions in the area have been reduced. It is very unlikely that we will see another earthquake like this for a few hundred years, since it has been at least that long since the last "big one" in this area. So, from that standpoint, the earthquake has actually made the area safer than before, and therefore could positively affect property values.

 

How existing structures are affected depends on how they fared under the stresses of this quake. If they sustained absolutely no damage, then I would say they indeed have been "earthquake tested" and can be considered safe and their value could increase. If they sustained cosmetic damage, then  would say their value would be slightly negatively affected. If there is structural damage, then the affect on their value could be substantially negative. If they failed structurally (even if only a portion of the structure) then the value of the property is reduced to the "land only" value.

 

Considering the fact that there are about 30,000 severely damaged homes between Bohol and Cebu, there are likely to be some real deals that come along. As was mentioned, desperation sales are where you can actually get a good deal on real estate here. Don't expect existing houses that experienced no damage to drop in price. If anything, they have probably proved their worth. Those structures that failed (or have substantial damage have proved they are worthless. Many of those who own houses that were badly damaged or destroyed will not have the funds to rebuild, and that might create a lot of opportunity for those with money.

 

If the Philippine government wakes up, and actually starts enforcing their building code (which is modeled on the US building code), then structures built in the future could be much safer, and values could increase. Right now, the builder is required to inspect their own work, rather than having a government building inspector come out and check the work. It is pretty obvious that self-inspection hasn't worked out very well in a lot of cases. The government really needs to start enforcing the building code...especially the structural components...if it wants to avoid future catastrophes like this one. If they don't start enforcing their existing laws, then overall values will only go down in the future.

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musicman666

Did the earthquake affect values in the housing market and how will values be affected, if so? I'm guessing there are as many answers as there are properties.

 

Let's look at the earthquake and aftershocks first. It is very likely that this was the "big one" for this region of the Philippines. The aftershocks have not just been on the fault that produced the earthquake, but have been on numerous fault lines on Bohol, under the Bohol Straits, and even on Cebu. That is good news...because it means that the overall tensions in the area have been reduced. It is very unlikely that we will see another earthquake like this for a few hundred years, since it has been at least that long since the last "big one" in this area. So, from that standpoint, the earthquake has actually made the area safer than before, and therefore could positively affect property values.

 

How existing structures are affected depends on how they fared under the stresses of this quake. If they sustained absolutely no damage, then I would say they indeed have been "earthquake tested" and can be considered safe and their value could increase. If they sustained cosmetic damage, then  would say their value would be slightly negatively affected. If there is structural damage, then the affect on their value could be substantially negative. If they failed structurally (even if only a portion of the structure) then the value of the property is reduced to the "land only" value.

 

Considering the fact that there are about 30,000 severely damaged homes between Bohol and Cebu, there are likely to be some real deals that come along. As was mentioned, desperation sales are where you can actually get a good deal on real estate here. Don't expect existing houses that experienced no damage to drop in price. If anything, they have probably proved their worth. Those structures that failed (or have substantial damage have proved they are worthless. Many of those who own houses that were badly damaged or destroyed will not have the funds to rebuild, and that might create a lot of opportunity for those with money.

 

If the Philippine government wakes up, and actually starts enforcing their building code (which is modeled on the US building code), then structures built in the future could be much safer, and values could increase. Right now, the builder is required to inspect their own work, rather than having a government building inspector come out and check the work. It is pretty obvious that self-inspection hasn't worked out very well in a lot of cases. The government really needs to start enforcing the building code...especially the structural components...if it wants to avoid future catastrophes like this one. If they don't start enforcing their existing laws, then overall values will only go down in the future.

Bohol has been through the mill but Cebu itself was on the sidelines ....who is to say there isn't a little tension that needs to be released right under Cebu City?

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Brucewayne

well then there has always been a bubble and always will be....i think the kind of price cuts your looking for is when everyone at the same time tries to leave town like in the walking dead... how can i have a bubble if my house is paid for ... screw the banks ,, paid for means no interest rate hikes.. no rise in payments.. i can wait till jesus comes as that goes for almost all the homeowners... your looking massive price cuts and that just is not going to happen...

 

Bubbles are the cause and effect of buyers and sellers, not owners with no intention of buying or selling.

It can effect you in other ways though, both positively and negatively depending on what your needs are, but if your property isn't for sale, be bearish and don't list it for sale during lean times, that is the time you buy and I do know that is what you do.

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Did the earthquake affect values in the housing market and how will values be affected, if so? I'm guessing there are as many answers as there are properties.

 

Let's look at the earthquake and aftershocks first. It is very likely that this was the "big one" for this region of the Philippines. The aftershocks have not just been on the fault that produced the earthquake, but have been on numerous fault lines on Bohol, under the Bohol Straits, and even on Cebu. That is good news...because it means that the overall tensions in the area have been reduced. It is very unlikely that we will see another earthquake like this for a few hundred years, since it has been at least that long since the last "big one" in this area. So, from that standpoint, the earthquake has actually made the area safer than before, and therefore could positively affect property values.

 

How existing structures are affected depends on how they fared under the stresses of this quake. If they sustained absolutely no damage, then I would say they indeed have been "earthquake tested" and can be considered safe and their value could increase. If they sustained cosmetic damage, then  would say their value would be slightly negatively affected. If there is structural damage, then the affect on their value could be substantially negative. If they failed structurally (even if only a portion of the structure) then the value of the property is reduced to the "land only" value.

 

Considering the fact that there are about 30,000 severely damaged homes between Bohol and Cebu, there are likely to be some real deals that come along. As was mentioned, desperation sales are where you can actually get a good deal on real estate here. Don't expect existing houses that experienced no damage to drop in price. If anything, they have probably proved their worth. Those structures that failed (or have substantial damage have proved they are worthless. Many of those who own houses that were badly damaged or destroyed will not have the funds to rebuild, and that might create a lot of opportunity for those with money.

 

If the Philippine government wakes up, and actually starts enforcing their building code (which is modeled on the US building code), then structures built in the future could be much safer, and values could increase. Right now, the builder is required to inspect their own work, rather than having a government building inspector come out and check the work. It is pretty obvious that self-inspection hasn't worked out very well in a lot of cases. The government really needs to start enforcing the building code...especially the structural components...if it wants to avoid future catastrophes like this one. If they don't start enforcing their existing laws, then overall values will only go down in the future.

 

yes, I agree.

 

and I thinks it also showm contrary to what has been suggested elsewher on the forum in the past, that the Phils had Haiti style construction standards

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Brucewayne

I would venture to guess that the amount of people that go to the Philippines versus Haiti though is exponentially different. 

 

There are a few extremely expensive world class resorts in the Philippines that are frequented by the "ultra rich". I can't say this about Haiti. 

 

http://www.amanresorts.com/amanpulo/resort.aspx

 

The "ultra rich" will continue to come to the Philippines even after the earthquake. The top resorts will not be lowering their prices either. 

 

Port Au Prince has the Philippines beat for luxury, but tourism really is way down due to political instabilities (worse than in the Philippines), but still, very luxurious and normally higher standards of said luxury than in the Philippines.

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smokey

Bubbles are the cause and effect of buyers and sellers, not owners with no intention of buying or selling.

It can effect you in other ways though, both positively and negatively depending on what your needs are, but if your property isn't for sale, be bearish and don't list it for sale during lean times, that is the time you buy and I do know that is what you do.

bruce your still thinking like a person in real estate in the west ... the best thing that ever happened to the philippines is to force people to live within their means as to real estate now there will be a bubble in cars for sure with all the shaky 60,000 peso all in deals..

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