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billy

Condos starting to faulter

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billy

i was looking at a couple resale condos a year ago. they are in an upscale condo building. i was reading the paper a week ago and saw they were both for sale still. one was listed for 12 mill and now he's asking 9.75 mill. the other they were asking 12 mill now 10.5.... at the time i offered 11 mill and the lady accepted but she wanted me to pay all closing costs which were around 800,000... i told her at the time she pays her closing costs i will pay mine and she said no....  so i said forget it.... anyone even thinking of buying a condo now be fair warned you are taking a big risk. there are so many buildings under construction with no renters to fill them. we will see blood on the streets with condos....

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Skywalker

It is pretty common here for the buyer to pay all the outgoings of the seller.  It's not what we are used to that's all.

 

Is this going to be another Condominiums crashing and burning thread?  We have covered this quite a few times.

 

Is there something new?  What is the falter now?

Edited by Skywalker
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Lee

Billy your reference relates to mid to high end condos, so I  sort of agree, just as I have always said, buying something in a price range that fewer people can afford, means it will be difficult to sell in a country where borrowing money is difficult and costly, if a person manages to even find a way to borrow. 

 

There are many condos going up and the units are getting smaller and smaller in order to keep the price range down and the builders offer no interest loans for short lengths of time. More second hand condos are showing up online for sale or for rent and not a lot of movement seems to be taking place, so IMO you are correct to some degree but I believe that lower priced condos will continue to sell or rent to those with dreams of getting rich or those who need a place to put their heads down at night. 

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Lee

BTW, as I look out my balcony there are approx 20 high rise buildings going up with most of the condos that I have researched having under 30 sq meter units to keep the prices under p3 million.

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Ronin

I would insist that I paid the sellers cost but deduct that from the price.

 

If the seller "Forgets" to pay their part, you're stuck with a condo you cant sell until it's paid.  Also, I think there additional penalties for late payment.

 

The 3 million is a magic number, above that (3.2 IIRC), you pay a 12% vat (Davao jump in if I'm wrong).

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Lee

  1. sale of residential lot valued at one million nine hundred nineteen thousand five hundred Philippine pesos (Php1,919,500.00) and below

sale of house and lot and other residential dwellings valued at Three million one hundred ninety-nine thousand two hundred Philippine pesos (Php3,199,200.00) and below.

Philippines: VAT essentials  unless it has changed, this should be it

 

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Skywalker
The 3 million is a magic number, above that (3.2 IIRC), you pay a 12% vat (Davao jump in if I'm wrong).

 

Which is why they often market these small condos as pairs.  Buy 2 save the VAT, and knock together.  I don't think the VAT threshold figure is quite that high though.

 

Edit:  Thanks Lee.

Edited by Skywalker

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Lee

Anyone know what it is on condos?? I assume it is number 2

Edited by Lee

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smokey

BTW, as I look out my balcony there are approx 20 high rise buildings going up with most of the condos that I have researched having under 30 sq meter units to keep the prices under p3 million.

wow 100,000 peso a sq meter ... dang  that's not fair super houses can be build for 35.000 sq meter  I should turn my place into condos its tall and has an elevator and plenty of parking

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bkkmarlowe

 

 

hey often market these small condos as pairs. Buy 2 save the VAT

 

The Taxation department are a wake up to this and have now clamped down on it with new regulations and VAT fees re buying adjoining condos. I think this was published on their website... ?

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A_Simple_Man

 

 

as I look out my balcony there are approx 20 high rise buildings going up with most of the condos that I have researched having under 30 sq meter units to keep the prices under p3 million.

 

If all the developers jump on the band wagon does that mean the horse is guaranteed to be able to pull it?

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dc3driver

wow 100,000 peso a sq meter ... dang  that's not fair super houses can be build for 35.000 sq meter  I should turn my place into condos its tall and has an elevator and plenty of parking

well you really should. Wait a minute, I thought you already did!
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billy

Condos have seen there day. It doesnt matter what size or price, there is a glut of condos. Think about it filipinos cant afford to pay the rent on studios. There isnt enough foreigners to rent them. The writing is on the wall. Of course condo owners on linc are going to take this personally. The rents will drop the investors will dump them when they cant be rented. Its going to be a mess its starting now.. Ive been following the market closely. It takes months and months to rent them. Then when your tennant leaves another 3-6 months to rent and the rents are dropping. There are so many for rent everywhere. Condo buildings are empty..... DONT BUY A CONDO NOW WaIT THE PRICE WILL DROP

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contraman

I tend to agree that the market is already saturated.

I started testing the water about 18 months ago in regards to renting a condo.

I was in no hurry and looked at 6 that I would thought suit me.

Pricing was in the 30 to 40 k range.

I did not go ahead until September 2013 when I took up a 12 months lease on this place.

When I first looked at this unit, it was being offered at 40k, it had no one in it for over 6 mths and

I pay 25k, some discount in anyones money. (That makes a total of 13 months that it was empty)

(I even got my bathroom door fixed to boot) :)

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billy

For anyone that owns a condo that doesnt believe me try selling your condo. Umless you give it away and slash your price no chance on selling...

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Bill H

I have never understood the fascination with Condos.  Unless there have been major changes and upgrades; the Cebu fire department is unable to do much of anything past the 7th story.  How tall are these new buildings?  Who wants to live in a building where there is little chance of help for the residents on the upper floors?  Just a disaster waiting to happen I think.

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Contango

Manila is the Condo capital and is so because its a city of 12 million people, the bulk of new residential buildings being built in Manila are Condos and that would be pretty much the same for all the other global city's with populations over 10 million, houses are built on the outer fringes of the City and Condos in the City, all that Condo development can look to be excessive but there is no other housing choice.

 

I have spoken with quite a few Condo owners in my development and found that Half the Filipino occupiers of Condos in my development have bought with in house financing and the other half have financed through relatives working over seas, the foreigners which number about 1 in 20 have paid cash in one form or another. I haven't met any renters yet but have noticed lots of empty condos most of which are for sale by the developer...they seem to be in no big hurry to sell, and will not discount beyond 10% or so.

 

The big developers often issue notes to raise working capital and these notes typically pay around 5 > 6%, they then provide in house financing at around the 10 > 12% mark...the Condo construction bubble can go on for a while yet, 5 or 10 years i would think.

 

I have never understood the fascination with Condos.  Unless there have been major changes and upgrades; the Cebu fire department is unable to do much of anything past the 7th story.  How tall are these new buildings?  Who wants to live in a building where there is little chance of help for the residents on the upper floors?  Just a disaster waiting to happen I think.

All the 4 Manila Condos i have stayed in over the last 4 years have been fitted with sprinklers, pretty sure its a mandatory requirement...as for fascination i guess it has something to do with amenity's and infrastructure and the fact that Condos have it, i like the pools, view, Gym, Club house, Guard house, 24/7 power and water and the Fibre net/TV connection is pretty sweet...oh and ownership is a big + factor.

Edited by Contango
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Buko Beach

To be fair, you can find the same listing that are being continually reposted on various websites by over a dozen different agents (some real, some associates, and self professed agents) for the same listing. All are at wildly different price points even if the listing is no longer valid. They don't care, most just cut and paste online hoping to hit the lottery in the form of a commission.

 

The Philippines is a domestic based economy. You could take all the foreigners out of the Philippines and it would only be a drop in a growth happy PI GDP bucket. The PI real estate market is not geared towards foreigners, we are just the ones who get caught up in the shell game sometimes.

 

Most condo towers in Cebu are in pre-sale mode for years before a shovel gets put in the ground and construction doesn't begin before a certain percentage of units are sold. A lot of those units are sold mainly to OFW's, other Asians (Chinese/Korean), and a rapidly growing middle class that wants a slice of western living. Ask a real estate agent in Cebu if they sell to many foreigners and they will tell you that a lot like to take the tours and kick the tires. They like to impress their one-week Filipina romances, but most balk at the prices. Foreigners see poverty in the streets and they feel the condos are over priced for the setting and they will wait until the crash which may or may not come.

 

One agent that I know now charges foreigners a small fee (500p) for gas and driver to show them properties. If the foreigner objects to the fee she walks away because if they do not want to pay 500p (in her experience) they are not serious and are only looking for a free tour of Cebu.  

 

There is a lot of demand in Cebu for condo towers that appear 'special' and upscale like The Residences at Marco Polo. When they first started to pre-sell they planned for max 4 towers, but now there are plans for 6-8 and most of the prime units are sold. The developers own the whole ridge from Marco Polo to the back of GCM, so expect 10-12+ towers if the demand holds. There are a lot of Cebu towers in pre-sale mode that are in the mid-higher end of the condo market and a lot of the choice units are already sold.

 

May be things will change once all the condo towers around SM Seaside are built, but so far the market has held pretty firm.

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smokey

well you really should. Wait a minute, I thought you already did!

no not yet I thought I could open a clown college but someone is already doing that

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smokey

Condos have seen there day. It doesnt matter what size or price, there is a glut of condos. Think about it filipinos cant afford to pay the rent on studios. There isnt enough foreigners to rent them. The writing is on the wall. Of course condo owners on linc are going to take this personally. The rents will drop the investors will dump them when they cant be rented. Its going to be a mess its starting now.. Ive been following the market closely. It takes months and months to rent them. Then when your tennant leaves another 3-6 months to rent and the rents are dropping. There are so many for rent everywhere. Condo buildings are empty..... DONT BUY A CONDO NOW WaIT THE PRICE WILL DROP

what happened to the I own this unit and don't care if its rented in this decade ..... I had no renter for over 6 months and I did not jump off a bridge .... if a unit is owned its owned and bubble free

I tend to agree that the market is already saturated.

I started testing the water about 18 months ago in regards to renting a condo.

I was in no hurry and looked at 6 that I would thought suit me.

Pricing was in the 30 to 40 k range.

I did not go ahead until September 2013 when I took up a 12 months lease on this place.

When I first looked at this unit, it was being offered at 40k, it had no one in it for over 6 mths and

I pay 25k, some discount in anyones money. (That makes a total of 13 months that it was empty)

(I even got my bathroom door fixed to boot) :)

and the reason is 30 to 40 is way over priced for the size and size matters ..

I have never understood the fascination with Condos.  Unless there have been major changes and upgrades; the Cebu fire department is unable to do much of anything past the 7th story.  How tall are these new buildings?  Who wants to live in a building where there is little chance of help for the residents on the upper floors?  Just a disaster waiting to happen I think.

true but more people get killed riding in a bus then from fire in a condo

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Oasis Monarch

I tend to agree that the market is already saturated.

I started testing the water about 18 months ago in regards to renting a condo.

I was in no hurry and looked at 6 that I would thought suit me.

Pricing was in the 30 to 40 k range.

I did not go ahead until September 2013 when I took up a 12 months lease on this place.

When I first looked at this unit, it was being offered at 40k, it had no one in it for over 6 mths and

I pay 25k, some discount in anyones money. (That makes a total of 13 months that it was empty)

(I even got my bathroom door fixed to boot) :)

Could you tell us the general vicinity, size/number of bedrooms, whether furnished/unfurnished, condo facilities (pool/gym/security/ etc.) of the condo you rented so that the rent you pay (25K) can be viewed in the proper perspective? Did you get a parking space also? I take it utilities/condo dues are the tenant's responsibility?

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sperry

For anyone that owns a condo that doesnt believe me try selling your condo. Umless you give it away and slash your price no chance on selling...

 

well why shoild I try selling it? i like living here.

 

Why should I give it away? I need somewhere to live.

 

Maybe I bought with the price already slashed. I wouldnt commit to investing a large percentage of my total wealth to Cebu.

All it takes is for the workers to start demanding a fairer redistribution of wealth or a tectonc slip and you could you lose everything.

 

Ive always considered my house my home... and not an investment.

 

But I kind of agree... I doubt if people paying 100K/sqm in today's market will make a quick buck. I suspect it will take a long time to get the money back. There are loads of places in even high cost Europe where you can buy quality real estate for a lot less than that.

 

And I also agree that buying 2 small adjacent units to avoid VAT is now pretty much impossible.

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billy

To be fair, you can find the same listing that are being continually reposted on various websites by over a dozen different agents (some real, some associates, and self professed agents) for the same listing. All are at wildly different price points even if the listing is no longer valid. They don't care, most just cut and paste online hoping to hit the lottery in the form of a commission.

 

The Philippines is a domestic based economy. You could take all the foreigners out of the Philippines and it would only be a drop in a growth happy PI GDP bucket. The PI real estate market is not geared towards foreigners, we are just the ones who get caught up in the shell game sometimes.

 

Most condo towers in Cebu are in pre-sale mode for years before a shovel gets put in the ground and construction doesn't begin before a certain percentage of units are sold. A lot of those units are sold mainly to OFW's, other Asians (Chinese/Korean), and a rapidly growing middle class that wants a slice of western living. Ask a real estate agent in Cebu if they sell to many foreigners and they will tell you that a lot like to take the tours and kick the tires. They like to impress their one-week Filipina romances, but most balk at the prices. Foreigners see poverty in the streets and they feel the condos are over priced for the setting and they will wait until the crash which may or may not come.

 

One agent that I know now charges foreigners a small fee (500p) for gas and driver to show them properties. If the foreigner objects to the fee she walks away because if they do not want to pay 500p (in her experience) they are not serious and are only looking for a free tour of Cebu.  

 

There is a lot of demand in Cebu for condo towers that appear 'special' and upscale like The Residences at Marco Polo. When they first started to pre-sell they planned for max 4 towers, but now there are plans for 6-8 and most of the prime units are sold. The developers own the whole ridge from Marco Polo to the back of GCM, so expect 10-12+ towers if the demand holds. There are a lot of Cebu towers in pre-sale mode that are in the mid-higher end of the condo market and a lot of the choice units are already sold.

 

May be things will change once all the condo towers around SM Seaside are built, but so far the market has held pretty firm.

my guess is your a condo owner.  what you say sounds good but i beg to differ from what your saying... lets see in three years who's correct

what happened to the I own this unit and don't care if its rented in this decade ..... I had no renter for over 6 months and I did not jump off a bridge .... if a unit is owned its owned and bubble free

and the reason is 30 to 40 is way over priced for the size and size matters ..

true but more people get killed riding in a bus then from fire in a condo

for people that own a condo and don't care about renting or selling it doesn't matter but if you decide to rent it out or sell then you will see the real world

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Skywalker
for people that own a condo and don't care about renting or selling it doesn't matter but if you decide to rent it out or sell then you will see the real world

 

So I am correct in assuming that you have not bought a condo (or a house) and you are renting?  Well that is your reality.

 

I don't see why you think it's a bad idea for other people.  I have a condo.  It's my home (when it's finished) and I don't think too much about the 'investment' potential.  

 

I wanted a condo because I don't want to give money to a landlord for the rest of my days.  I like the security aspect, and the idea that I can lock it up and go away for months at a time, without worrying about squatters.  I can't own land, therefore I can't own a house.  I certainly wouldn't get married to someone I barely know, and throw my money at a house that I could never own.  A condo title can go in my name and be legally mine.

 

When I lived in Bangkok, there was a building boom going on there, and the same thing was being said, by foreigners who, like Billy, didn't understand the economics of the condo industry.  There has still not been a massive price readjustment in Bangkok, or Singapore for that matter, and the Hong Kong market has recovered very quickly from their brief hiccup.

 

If you wait, you will just give yet more money to landlords, money better spent on buying your own home.

Edited by Skywalker
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billy

So I am correct in assuming that you have not bought a condo (or a house) and you are renting?  Well that is your reality.

 

I don't see why you think it's a bad idea for other people.  I have a condo.  It's my home (when it's finished) and I don't think too much about the 'investment' potential.  

 

I wanted a condo because I don't want to give money to a landlord for the rest of my days.  I like the security aspect, and the idea that I can lock it up and go away for months at a time, without worrying about squatters.  I can't own land, therefore I can't own a house.  I certainly wouldn't get married to someone I barely know, and throw my money at a house that I could never own.  A condo title can go in my name and be legally mine.

 

When I lived in Bangkok, there was a building boom going on there, and the same thing was being said, by foreigners who, like Billy, didn't understand the economics of the condo industry.  There has still not been a massive price readjustment in Bangkok, or Singapore for that matter, and the Hong Kong market has recovered very quickly from their brief hiccup.

 

If you wait, you will just give yet more money to landlords, money better spent on buying your own home.

by the way i own a home and building a second vacation  home. i'm fully aware of the housing market here

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