stagflation

I am not sure how this will pan out. I would think in terms of real estate that 60%/40% rule may still stick. Also land maybe a no-go. But who knows, perhaps instead of landownership they start offering 50-100 year leases like in Thailand. I wonder if this rule is to attract more equity/fixed income fund managers, banks for savings & loans etc?

PH to allow entry of 100% foreign-owned investment houses http://business.inquirer.net/235564/ph-allow-entry-100-foreign-owned-investment-houses NEWS Fully foreign-owned investment houses will be allowed to operate in the country as the government will remove the restriction under the soon-to-be-released latest foreign investment negative list (FINL). Socioeconomic Planning Undersecretary Rosemarie G. Edillon said the Neda Board was expected to approve in a meeting in early September the removal of investment houses and financial investors from the 11th FINL. Every two years, the government releases the FINL, the list of sectors where foreign ownership or participation is limited. The 10th FINL issued by former President Aquino in 2015, through Executive Order No. 184, had practically kept intact the 9th FINL list of activities and sectors restricted to foreign equity and participation. According to EO 184, financing companies and investment houses regulated by the Securities and Exchange Commission were allowed to have up to 60-percent foreign equity participation. The consensus to remove investment houses from the FINL was reached during a recent meeting of the country’s economic managers, who found that there was no constitutional restriction in the ownership of investment houses, Edillon said. “Except if it involves, let’s say, damages or collateral, then it will be subject to constitutional restriction,” Edillon said. The Neda official said certain foreign-owned investment houses had expressed interest to set up shop in the country. As soon as the restriction is lifted, the government hopes to see interested firms to establish presence in the country, Edillon said. (Source: Philippine Daily Inquirer, 22 August 2017) Coillers RESEARCH VIEW The relaxation of foreign ownership restrictions under the foreign investment negative list (FINL) is a step in the right direction as it is expected to spur foreign investments into the Philippines. The easing of foreign ownership restrictions bodes well for the economy in general and the opportunities spill over to other key sectors such as property. The enactment of RA 10641 allowed the entry of foreign banks and this, in turn, contributed to greater office space absorption in Metro Manila. We are optimistic that the government’s decision to allow 100% foreign-owned investment houses to operate in the country should also chip in to office space absorption in the country’s capital. Moving forward, the lifting of foreign ownership cap in a number of economic sectors should also trickle down to residential, retail, and industrial segments.

http://www.zerohedge.com/news/2017-05-16/randon-walk-down-baltimores-triangle-death - in edit, added by drb - excerpt of image: worst area:

http://cnnphilippines.com/news/2017/04/19/Metro-Manila-subway-Mega-Manila-Subway-project-Duterte.html It appears to be that the proposed station in Makati is by Kalyaan Avenue. A quick search shows that this is right next to Rockwell and approx 1km from Makati Ave. I wonder why Makati Ave doesn't have a proposed stop? Too dense// disruptive to construct a station there? Any thoughts?

So Circuit Makati is 3.8km away from Makati CBD vs BGC is 2.9km(??) from Makati CBD Residential Prices at Circuit (140k) vs Residential Prices on secondary market in Makati and BGC (150-200k) implies a 5-30% premium. I would still rather pay a premium to be near the high paying jobs than to an area with 20 restaurants and not much else going on around it. Furthermore, if a new train system is ever built to serve Makati and The Fort and possibly the airport, what are the chances of Circuit having a stop along that line? The only project I would consider in Circuit is their Grade A commercial project (forgot the name, Stiles Enterprise ??) and if Prices are still at 140k for Grade A vs Makati (250k) and BGC (230k). Since the difference is 60-90%.

Back of the envelope calculations 270m (4.5m per floor for high ceilings) = 60 floors 180 flats = 3 flats per floor 5,000,000,000 for 180 flats = 27,000,000 pesos per flat 3500 sqm lot *33% building floor plate = 1166 sqm In other words 350-400sqm units gross area per unit for 27,000,000 construction cost. The construction costs seems a bit too cheap for a very high end luxury project. I can't imagine a project like this being sold for anything below 300,000php per sqm I.e 100,000,000mn + ticket size I wonder what the price tag on the land area is and whether 5bn pesos really is a true reflection of the building costs. If they are, time to pile into the developers stocks

"In the Philippines, the luxury building will rise on a 3,500-hectare idle land that has been jointly owned by the Ty and Sy families since the 1980s. It will be a 50-50 venture with the Ty group, Sy said.t Read more: https://business.inquirer.net/228653/beautiful-skyscraper-ph-set#ixzz4fvfKCZyu Follow us: @inquirerdotnet on Twitter | inquirerdotnet on Facebook" Is that lot really 3500 hectares? That sounds way too big a plot, 3500*10,000 = 35,000,000 sqm land area? Am I missing something here?

I guess the primary market of selling at 10% or 20% spread over 48 months (if 5mn pesos then only need to pay 10k pesos monthly) seems like an interesting option for a lot of buyers. Not sure if they need to apply for the 80% balloon payment immediately or whether this is done a few months prior to the completion (40th month onwards?). are there any consequences for buyers who walk away during the 48months if they can't resell their contract to sale? Treat the purchase as a 4-year call option. The disconnect in prices between primary and secondary is very significant to ignore. Another issue I have with the primary sales market is that their congratulations sellout messages followed by price hikes don't make any sense. For example, ALVEO will keep hiking prices on projects that have already sold out only to suddenly release stock on their inventory 2-3 years later. Who knows what the true reflection of take up is? most agents don't really have a response for why inventory suddenly exists on fully sold buildings. I understand a few foreclosures for various reasons and being handed back to the developer. But not multiple floors / units. This is just a rant for the lack of transparency.....

Well today's announcement of a $10,000,000 hkd (approx $1.3mil usd) for a 1 bedroom apartment in the suburbs (Tsuen Wan) is definitely worth watching. Clearly the market is favouring developers stock with their financing programmes available. Question is at what price will the market stop rushing into these units?

Philippine Pesos Troubles Just Beginning The peso is down 8% and investors are dumping stocks amid doubts about Dutertes economic agenda. By William Pesek You can spin voters and the media, but currency traders are a harder lot to fool. Thats dawning on Filipinos as markets render a damning verdict on Rodrigo Dutertes 266 days in the presidential palace. The peso - down nearly 8% in that time - is buckling under the weight of a chaotic and distracted administration with little time for economic reforms. Lots of body bags - more than 8,000 and counting - but no big wins on attacking poverty, increasing job growth or improving infrastructure. Now, those bodies, casualties of Dutertes war on drugs, are fueling impeachment talk in Manila. A longshot, perhaps, but this sudden surge of palace intrigue could further impede whatever economic agenda Duterte might have up his sleeve - and hit the peso even harder. Already, his vendetta against drug pushers and users has derailed much of the momentum that followed populist Duterte into the palace on June 30th. Prior to that day, investors had been clamoring for peso assets thanks to predecessor Benigno Aquinos structural upgrade drive. Aquinos efforts from 2010 to 2016 to increase transparency, strengthen government accountability and repair the national balance sheet won the Philippines its first ever investment grade ratings. Much was left undone, of course. Turning around a long-neglected economy and a notoriously corrupt political system isnt a six-year job. Voters hoped strongman Duterte would turn Aquinonomics up to 11. Duterte Harry, as hes known, made his tough-on-crime bones as mayor of Davao City. Voters were also enamored with his economic successes in that southern city, including less inequality than many other Philippine metropolises, his willingness to take on vested interests and attention to improving roads, bridges, ports and power grids. Just as Indians turned to Narendra Modi to take his Gujarat model national, Filipinos figured Duterte would drain the swamp in Manila and increase prosperity. Instead, the peso started this month at 10-year lows, a clear sign investors doubt the Davao City model argument. Duterte is being haunted by allegations of involvement with corruption and unlawful killings during his mayor days. While he denies it, the impeachment complaint filed by opposition politician Gary Alejano highlights the magnitude of the resistance Duterte faces - opposition that will make it increasingly difficult to implement economic upgrades. Vice President Leni Robredo, meanwhile, is calling out what she sees as Dutertes human rights abuses. Robredos public opposition, unprecedented in Philippine history, will spark questions including among international partners as to the stability of the Philippines government, says Christian Lewis of Eurasia Group. Overseas investors, too, who as of early March had sold more than a net $120 million of Philippine stocks this year. The outflows could easily accelerate as Duterte Harrys government descends into Game of Thrones farce. Hes tried to oust Robredo, excluding her from policy deliberations and cabinet meetings. Speculation is rife that he wants to replace her with Ferdinand Marcos Jr., son of the former dictator who morphed one of Asias richest economies into the Sick Man of Asia. Duterte faces accusations of Marcos-like behavior: amassing $40 million and arresting Senator Leila de Lima, a vocal critic, on charges many deem questionable. DUTERTE IS IN THERES-NOTHING-TO-SEE-HERE MODE: trade talks with Chinese Vice Premier Wang Yang, visiting Thailand to discuss South China Sea issues, swinging by Myanmar to strengthen partnerships, scoffing at talk of the International Criminal Court putting him on trial over his anti-drug crusade, telling business groups more prosperous days are on the way. Currency traders arent buying it, and wisely so. Dutertes machine-gun fire squads are distracting him from lowering personal income, corporate and inheritance tax rates, boosting levies on fuel, vehicles, cigarettes and alcohol, reducing tax evasion, attacking official graft, crafting a clear mining policy to tap vast stores of national resources and doing something about productivity-killing traffic in Manila. Each of these changes is vital to attracting foreign capital to pay for better infrastructure, education and healthcare. Each is needed to move the Philippines up on global competitiveness rankings. Its currently 57th on the World Economic Forums index, trailing Slovenia and Turkey. Theres still time for a presidency course correction. But Duterte must act fast, and convincingly. In September, just 83 days into his term, Standard & Poors threatened Manilas credit rating, warning about policy unpredictability and a drug war that could undermine respect for the rule of law and human rights. As if investors werent spooked enough, Duterte lashed out at S&P in an expletive-laden rant. I would say to the ratings [agencies] in business and the economy, so be it. Leave us. Then we will start on our own. I can go to China, I can go to Russia. I had a talk with them, they are waiting for me. So what the hell? Currency traders are wondering as much, too. Only theyre not asking questions. Theyre selling. http://www.barrons.com/articles/philippine-pesos-troubles-just-beginning-1490230355

For sure for consumers who are net-short (living in HK, have real estate needs) like yourself, this will take away from supply in the secondary market. But a 30% upfront stamp duty on foreigners who purchase HK residential today....I guess hot money will flow either to commercial / industrial / carparks or an even more sensible decision is hot money flows from mainland simply avoid HK and move on elsewhere. It will be interesting to see if Residential Developers will a) Try and attract investors by rebating a 15-30% stamp duty and keep per sq ft prices artificially high Only focus on first-time home owners and reduce per sq ft prices All those queue formations at new sale launches and priority given to multiple purchase investors should disappear. Any guesses/ predictions on whether hot money flows out of RMB shift into real estate elsewhere in the world? Will there finally be a cooling off in rentals, if secondary market transactions come to a standstill?

Today's bloomberg http://www.bloomberg.com/news/articles/2016-09-22/foreigners-shun-philippine-stocks-as-duterte-loses-luster-chart The money that flowed into the Philippines after presidential elections in May is drying up. As of Wednesday, the nation’s stock exchange had seen 20 straight days of foreign outflows, the longest stretch since 2007. Some investors are speculating that outbursts from President Rodrigo Duterte will have consequences beyond politics that affect the economy.

Let's see how this plays out....currently USD/PHP reaching new highs every week (peso devaluing). Would this necessary translate into higher remittances and be positive for the real estate sector? Am not too sure. I wonder how much of an impact has Duterte's vocal thoughts and extreme actions have had on the PHP. On another note, this is the first time in my listing scoutings that I've come across a 'Retail / Commercial' unit for sale in BGC. I'm not sure if it is cheap/ expensive or even how that street shop compares to other streets. https://www.olx.ph/item/300sqm-prime-commercial-space-for-sale-bgc-ID7y2V4.html?p=6&h=26b610ba28#26b610ba28 140,000,000 for 300 sqm (i.e. 450,000 per sqm). Assuming commercial prices are approx 200,000 per sqm, this translates to a 125% premium. Hah I wish there would be a way to long that retail unit, short the commercial directly above and milk the difference Edited by Steve Netwriter to remove unintended weird text