Jump to content
Sign in to follow this  
drbubb

DATA : Peso // Makati Property Price Data, News & Comments

Recommended Posts

The chart of the BSP index/ is PH's Central Bank - as reported by the St Louis Fed

> source/ ALFRED: https://fred.stlouisfed.org/series/QPHR628BIS

(in edit, Data & Chart added by DrBubb):

Chart v.1 : Chart-BSP-1 - Q4-16 = 157.33 / 2010 = 100

fiNTFBE.png

CHART v.2

KF6oLOO.png

=

DATA : ALFRED "Real Residential Prices for Makati, PH"

======

Qtr/Year : BSP-1 : BSP2 : QonQ : x--1100 : w-Adj.2 / Mak-Mid. QonQtr / Rent : QonQ/ Y-MakM
1Q /2014 : 118.44 : 118.4 :-0.17% : 124,320 : 136,280 / 136,533 : +1.20% / 0,810 : +0.62% / 7.12%
2Q /2014 : 118.73 : 118.7 : 0.25% : 124,635 : 136,790 / 138,083 : +1.13% / 0,820 : +1.23% / 7.13%
3Q /2014 : 121.23 : 121.2 : 2.11% : 127,260 : 141,040 / 142,750 : +3.38% / 0,830 : +1.22% / 6.97%
4Q /2014 : 122.65 : 122.7 : 1.24% : 128,835 : 143,590 / 144,500 : +1.23% / 0,838 : +0.96% / 6.96%
1Q /2015 : 129.34 : 124.8 : 1.71% : 131,040 : 147,160 / 147,350 : +1.97% / 0.848 : +1.19% / 6.90%
2Q /2015 : 132.22 : 126.0 : 0.96% : 132,300 : 149,200 / 149,000 : +1.11% / 0.862 : +1.65% / 6.94%
3Q /2015 : 135.20 : 127.5 : 1.19% : 133,875 : 151,750 / 151,000 : +1.34% / 0,875 : +1.51% / 6.95%
4Q /2015 : 137.75 : 127.2 :-0.24% : 133,560 : 151.240 / 151,300 : +0.20% / 0,883 : +0.91% / 7.02%
1Q /2016 : 140.66 : 127.3 : 0.08% : 133,665 : 151,410 / 152,000 : +0.46% / 0,865 : - 2.04% / 6.82%
2Q /2016 : 143.36 : 122.9 :-3.46% : 129,045 : 143,930 / 147,575 : - 2.91% / 0,855 : - 1.16% / 6.95%
3Q /2016 : 145.79 : 121.2 :-1.38% : 127,260 : 141,040 / 146,485 : - 0.74% / 0,840 : - 1.75% / 6.88%
4Q /2016 : 157.33 : ____ : ______ ______ : _______ / 150,600e: +2.81% / 0,837 : - 0.36% / 6.67% : at 7%Y= 143,500
1Q /2017 : ??.?? : ____ : ______ ______ : _______ / 155,000e: +2.92% / 0,823 : - 1.67% / 6.37% : at 7%Y= 141,100
Qtr/Year : BSP-1 : BSP2 : QonQ : x--1100 : w-Adj.2 / Mak-Mid. QonQtr / Rent : QonQ/ Y-MakM

========

Coverage includes flats and commercial properties in Makati (part of metropolitan Manila).

The series is deflated using CPI.
For more information, please see https://www.bis.org/statistics/pp_detailed.htm.

Share this post


Link to post
Share on other sites

Notional Rental yields continue to fall, as Rents slide, and CapVals are moved higher

 

Thanks for the link, ECB

 

I have extracted the data, and produced a chart (see above)

.

It is interesting to compare the BSP Data with the Makati mid-point data from Colliers.
I have the following observations

=====
+ From the 2009/2010 Low, Makati prices gained more, than did the BSP's index for metro-Manila.
From the low in 2009-11, the Colliers Makati data showed a nice 53% rise from P99,200 (Q4-2009) to P152,000 (Q1-2016).

And for the most comparable period, from P103,245 (Q1-2011) to P152,000 (Q1-2016), was +47%.
The BSP data rose only 28.5% from 99.2 (Q1-2011) to 127.5 (Q3-2015). / Note: 47%/28.5% = 165%

Greater growth makes some sense since many of the highest paying jobs are in Makati.

.

+ In my chart (above), I multiplied BSP index by 1050, to get the data shown in light green line (the BSP-x1050). I then made a further adjustment. A lined the low up with the Makati index, and then multiplied the changes from the low by 170% - ie magnifying the changes, so the total change in the 2x-adj index from 2010-2015 would fit the total change in the Makati data. This adjustment (x170%/105%) assumes that prices for Makati are about 65% more volatile than the BSP's index.

(Note: part of this might be because the inclusion of new properties as they were launched, helped to STRETCH the growth in prices that Colliers reported for Makati - making it seem much greater than it would have been for a like-vs-like comparison of a stable basket of completed properties.)

.
+ From the Q3-2015 peak, the BSP index fell 4.9% over the next four quarters, and the Makati mid-point fell just 3.6% over two quarters before bouncing, pushed by the inclusion of new super-luxury projects in the data. In the Colliers index for Makati, new projects pushed up the high-end price, and thereby raised the mid-point. My preliminary estimate for Q1-2017 shows a further rise in the mid-point of about +2.0%, even though Colliers has just reported a 1.7% drop in rents in Q1-2017. This means that average rents have dropped again. The notional rental yield using Colliers Rent assessment (P 823 psm) versus my own assessment of Capital values (P154,600) is now down to just 6.4%. This is about 10% below the "normal" level of yield of about 7% than we saw during the run-up of rents and prices.

.
+ This is not the first time that Colliers index has looked as if it has been manipulated. It looks like it was done back in 2008-2010, when the Makati index dipped just -2.7%, and the BSP index dropped from 109.7 to 99.2 - that is a drop of 9.1%. Having said this, it is possible that Makati values were more stable than the rest of the Metro-Manila market. Readers should keep in mind that the whole of Manila is the basis for the BSP index.

Share this post


Link to post
Share on other sites

NEW Chart - Colliers Data to Q1-2017 : P 155,000 + 2.9%
UIdB5mp.jpg : Adjustment, starts Q4-2016 :

On 5/12/2017 at 6:27 AM, DrBubb said:

Colliers Q1-2017 report is out now

EXCERPTS

"Colliers sees about 22,000 additional units being completed this year in the major business districts, with the Manila Bay Area accounting for two-thirds of the new supply.
While rents in major CBDs are declining, prices continue to grow albeit at a slower pace. The demand for luxury units is stable and this encourages affordable and mid-income developers to pursue high-end projects especially in the Manila Bay Area, where the demand for luxury projects has spilled over. Colliers encourages developers with significant ready-for- occupancy (RFO) units to lease out the units either individually or as shared units as long as the leasing schemes conform with the developers' market
positioning and do not lead to a deterioration of the units' perceived value.
2
Rental rates for premium three-bedroom units in Makati CBD declined by 1.7% to PHP823 (USD16.5) per sq m a month from PHP837 (USD16.7) per sq m in 4Q 2016. The drop was slightly faster than the 1.4% decline recorded in 4Q. We expect the rental decline to ease to between 1.3% and 1.5% over the next 12 months."

==

> http://www.colliers.com/-/media/files/marketing%20reports/1q2017-residential_market_report.pdf

"Market slowing down, well then just Raise the price, right?"

Raw data:
1Q /2016 : 152,000 : +0.46% : + 3.16 % : 107,000- 197,000 : 115,000 - 185,000 : 121,700 - 202,100 :
2Q /2016 : 147,575 : - 2.91% : - 0.96 % : 103,770- 191,380 : 111,760 - 180.760 : 120,390 - 200,040 :
3Q /2016 : 146,485 : - 0.74% : - 2.99 % : 103,010- 189,960 : 109.790 - 177,580 : 119,090 - 197,870 :
4Q /2016 : 150,600e +2.81% : - 0.00 % : 109,000- 274,600 : 110,500 - 226,400 : 188,400 - 207,700 : *274.6k x70%= 192.2k
1Q /2017 : 155,000e +2.92% : + 1.97 % : P97,400- 274,600 : 110,500 - 235,500 : 186,500 - 218,600 : > post#301
Qtr / Yr. : Mak-Mid. QonQtr : Yr.onYr. / Low - Makati - H / Low -Bonfacio- H / Low -Rockwell- H /
I used: P 155,000 + 2.92%, partly because Coliers reported an approx. 3% Gain in Capital Values in their Q1-2017 report


The Mean numbers from Colliers look like this


Old numbers / my numbers / Colliers' mean prices:
Qtr / Yr. : Mak-Mid. QonQtr / Makati - QonQtr : Bonfacio + chg. : Rockwell + chg. :
1Q /2016 : 152,000 : +0.46% / 152,000 : +0.46% : 150,000 : +0.00% : 161,900 : +0.00% :
2Q /2016 : 147,575 : - 2.91% / 147,575 : -2.91% : 146,260 : - 2.50% : 160,215 : - 1.04% :
3Q /2016 : 146,485 : - 0.74% / 146,485 : -0.74% : 143,685 : - 1.76% : 158,480 : - 1.08% :
4Q /2016 : 150,600e +2.81% / 191,800 :+ 30.9% : 168,450 : +17.2% : 198,050 : + 25.0% :
1Q /2017 : 155,000e +2.92% / 186,000 : - 3.0% : 173,000 : +2.70% : 202,550 : + 2.27% > post#301
========
Those HUGE jumps in price came, because Developers switched their strategies.

Instead of building so many cheaper places on the fringes of the CBD (places like The Beacon),
the switched to building more expensive, "world class" projects that they could sell to buyers less concerned
about Rental levels and yields:
The resulting jump in the Hi end of the range, raised the mid-point.

In fact, these new expensive projects have sold well. This could be because of growing international interest in investing in
property in the PH. And maybe also because high-income, and wealth Filipinos see these properties as a store of value.

> see: Is Manila becoming World Class: http://www.greenenergyinvestors.com/index.php?showtopic=21438

 

Share this post


Link to post
Share on other sites

Great Job and thanking you for enlightening us, I obviously am not that sophisticated in compiling

data and drawing graphs.

 

If possible can you also include the general rate of inflation against these indices? I believe the BSP

index is perpahs only slightly above the inflation rate while the Colliers Index is still substantially above this line.

 

This also means that price declines in the secondary market are going to be quite limited in my opinion,

and a big drop like 20-30pc is unlikely imo

 

Also on the makatiprime graph you mention 1pct inflation but the inflation rate has accelatered strongly

last year as well as this year, now already at 3.3pct I believe so that needs to be adjusted on the description.

 

The combination of a strong inflationary uptick as well as rising income should also soften the impact

of declining rents. Rents might decline further this year and into early 2018 and that might be the low point.

 

Yes I do believe the BSP index, even though it is a very broad index, covering the NCR, and also

the secondary market, is a better reflection of the value of the assets that we hold. much

better than the Colliers/JLL index which is influenced and used by the various developers,

mainly to -- like you said before -- create an illusion that all is well while the general market is more

in a soft patch now, for the time being. In other words: this is pure propaganda to manage the

perceptions of investors that everything is OK based on a small subgroup of properties in

the primary market.

 

Lastly, the BSP index really demonstrated the link between the stock markets and the general global economy (2008-2010)

and the real estate market in PH, and if we will see a major stock market selloff and/or the onset

of a strong recession in USA later this year, then I am convinced this will have a major impact on this BSP index,

This might be the cause for somehow bigger move to the downside in this index, and it might start

later this year.

 

If possible, -- and I know you re a good chartist -- can you compare the BSP index with the stock market index in USA

and show its correlation? To me this correlation looks quite strong,

If we re going to have severe drops in the main stock market indexes, than a 10pct decline in the BSP index cannot be ruled out,

maybe even 15pct in case of a severe recession.

Share this post


Link to post
Share on other sites

If possible can you also include the general rate of inflation against these indices? I believe the BSP

index is perpahs only slightly above the inflation rate while the Colliers Index is still substantially above this line.

 

... the inflation rate has accelatered strongly

... now already at 3.3pct....

 

...the Colliers/JLL index... this is pure propaganda to manage the perceptions of investors that everything is OK

based on a small subgroup of properties in the primary market.

 

... the link between the stock markets and the general global economy (2008-2010)

... a major impact on this BSP index,

 

Inflation is on the chart - it is the red line:

UIdB5mp.jpg

 

Q1-2017 inflation was +1.1% PER QUARTER - that's 4.4% per annum

 

The Raw data for inflation is collected on this thread

> Here : post#258: http://www.greenenergyinvestors.com/index.php?showtopic=18811&page=13

 

You may have missed this chart from Original Post on this thread

philippines-luxury-3-bedroon-condominium

 

Real condo prices "in constant 1995 prices" - ie the blue line

as measured by the (Colliers?) 3BR have declined over certain intervals.

If the 3BR index is "inflated" by the way the data is collected, and BSP data is more accurate,

then I would expect that there is an ongoing fall in real prices (measured by the BSP vs inflation.)

And, yes, there may not be scope for a 30% drop, unless we see a big jump in interest rates.

(That is unlikely imho, but almost nothing is impossible.)

 

Your ideas about looking at a correlation with stock prices - are interesting , but I may not get to them for a week or two, since I will be traveling in the coming days, and I have to prepare for my trip

Share this post


Link to post
Share on other sites

Filipinos prefer Land

"

If the 3BR index is "inflated" by the way the data is collected, and BSP data is more accurate,

then I would expect that there is an ongoing fall in real prices (measured by the BSP vs inflation.):

 

Filipinos and Filipinas prefer Land (and Lots) to Condos.

 

I am told that lots at Ayala's new Evo City project went on sale on Friday:

GfRBsDE.jpg

 

Sales Value: P7.48 w/VAT - Ave. Selling Price: P30K / sqm

"evo city launched today"

"I heard! Sold out in 7 hrs!"

"Yeah, sold out in a day. That's for phase 1."

"I'm not there in the launch. broker friends who are there are all amazed by the speed. lots are being gobbled up every hour."

"And they announced 7% increase after one day!"

(thnx to D. and J.!)

Share this post


Link to post
Share on other sites

POSITIVE ECONOMIC News - all seems rosy (for now)

+ Dept. Of Finance (DOF) hopeful on new Credit upgrade for PH

The Duterte Administration's TRAIN Tax reforms may permit a credit rating upgrade
Moody's has noted that the measures are positive, since they "will address the government's weak revenue generation"

+ The World Bank maintains PH GDP Growth forecasts for three years - PH faster than China

Just under 7% in 2017-19; Pegged at 6.9 percent for 2017, and 6.8 percent for 2018 - significantly above the long-term average of 4.3%, sai the WB report.

+ PH Stock index closed above 8,000-mark for the first time this year.

Closed at 8,001.38 up 93.72, or 1.19% higher, with robust trading volume of 1.09 billion shares. The Property sub-index was up 0.92 percent to 3,740.42

+ SM Prime is first PH listed firm to reach P 1-trillion Market Cap

SM Prime's finance chief, John Ong, added the success of hitting this valuation mark was due the integration, of all of its business units within SMPH, "increasing efficiencies in operation" and higher group revenues. Overall operating income increased in 2016 by 14 percent to P 9.6 billion from P 8.4 billion... "due to rental revenues from mall expansions in the least two years as well as higher real estate sales"

ph:SMPH / SM Prime ... all-data : 5-yrs : Last P 34.60 -- P/E Ratio: 40.25 / Yield: 0.76%

slb0g4N.gif

Share this post


Link to post
Share on other sites

NEWS reported here is not always positive

 

Remittance inflows slow down in April

 

Lowest in 15 months as Saudi workers repatriated

+ By 5.2 percent to $2.32 billion in April

 

This comes after a record in March, so it was partly a speed-up.

But a big repatriation of workers from Saudi Arabia is having an impact

Share this post


Link to post
Share on other sites

http://www.bsp.gov.ph/statistics/keystat/rrepi.htm

 

Hi

 

"Our index", -- the residential real estate price index -- for 1Q2017 from BSP is just out, and the preliminary conclusion

that I am tempted to make is that the secondary market is relatively strong and absorption of all this new supply

doesn't seem to cause major price falls. (yet)

 

The index for condominium units for all of PH reached a new all time high. For NCR we again approached

the old highs established during 3Q2016, while the results for the outside NCR are truly spectacular.

From 112,8 to 129,9 -- UP 15 pct in one quarter. Wealth appears to be spreading to this area as

MM is congested and oversupplied. This the biggest Qtr to Qtr rise ever in this index for Outs NCR I believe.

 

I had not expected this kind of result. It shows major resilience. And -- contrary to Colliers index --

which is heavily geared towards developers and new projects, comparing apples with pears,

this index confirms that the broader market is holding up well and that our investments appear

to be doing well, and the BSP index confirms the Colliers index.

 

The rally goes on...

 

From the BSP -- no fanfare, no media show -- just plain facts about 30pct of the secondary market.

Share this post


Link to post
Share on other sites

EASE of collection may be driving this...

 

http://www.philstar.com/business/2017/07/06/1716680/tax-reform-seen-hit-residential-market-hard

 

The bastion of free market capitalism gone in PH now??

New condominiums worth less than 3,2Million now VAT taxable in the very near future??

 

PH has great difficulty in collecting taxes.

The country has found that big companies - and property developers in particular, have provided an "efficient" mechanism for collecting TAX,

and especially the VAT tax.

 

If this threat is real - and I am not sure how to assess it - it may be a great time to beat the tax, and but something below the P 3.2 million threshold.

But there are precise few new flats in Makati and BGC at that price level.

Share this post


Link to post
Share on other sites

VAT Changes - what impact?

link:
> http://www.philstar.com/business/2017/07/06/1716680/tax-reform-seen-hit-residential-market-hard
=
EXCERPT:
"Colliers said the tax reform plan would slow down the residential market as the value-added tax (VAT) exemptions sought to be removed by the proposed program pertain to housing-related transactions.
“If the House bill is passed into law, selling prices of low-cost housing stand to add as much as P384,000 due to VAT. Colliers believes that the increase is quite significant especially for starting families or new professionals,” said Dinbo Macaranas, Colliers senior manager for research.
The Lower House approved House Bill 5636, also known as the Tax Reform for Acceleration and Inclusion (TRAIN) bill, last May 31.
The bill seeks to improve Filipinos’ disposable income by reducing personal income tax for majority of its citizens and at the same time, increase revenue collection by limiting VAT exemptions.
Colliers said part of the TRAIN bill is the removal of the VAT exemptions on the sale of low-cost housing, residential lots valued up to P1,919,500 and other residential dwellings priced up to P3,199,200 as well as lease of residential units not exceeding P12,800 per month.
Colliers said the tax reform plan would slow down the residential market as the value-added tax (VAT) exemptions sought to be removed by the proposed program pertain to housing-related transactions. “If the House bill is passed into law, selling prices of low-cost housing stand to add as much as P384,000 due to VAT. Colliers believes that the increase is quite significant especially for starting families or new professionals,” said Dinbo Macaranas, Colliers senior manager for research. The Lower House approved House Bill 5636, also known as the Tax Reform for Acceleration and Inclusion (TRAIN) bill, last May 31. The bill seeks to improve Filipinos’ disposable income by reducing personal income tax for majority of its citizens and at the same time, increase revenue collection by limiting VAT exemptions. Colliers said part of the TRAIN bill is the removal of the VAT exemptions on the sale of low-cost housing, residential lots valued up to P1,919,500 and other residential dwellings priced up to P3,199,200 as well as lease of residential units not exceeding P12,800 per month."
===

 

This seems important, and deserves more discussion here - so I will start a new thread about it

Share this post


Link to post
Share on other sites

My take on it is that this plan - if enacted - will boost the secondary market... So good if you bought before the VAT was implemented.

Now onto something else. Our good friend from thesystemisbroken has compiled new charts for the Residential Real Estate Price

index and it is the last chart, where you can see the almost parabolic spike in the prices for condos in the Ex-National Capital Region,

that is striking. The BSP PH condo index confirms the Colliers condo index meaning the silent rally is broad based.

 

He claims this index has little usefullness, but I strongly DISAGREE. This index is very useful because it completely removes foreign influenced

buying which we know is very often cash based, and it shows what local lenders think these assets are worth.

 

http://systemisbroken.blogspot.com/2017/07/the-unbearable-volatility-of-bsps.html

Share this post


Link to post
Share on other sites

About that VAT menace...

But there are precise few new flats in Makati and BGC at that price level.

Hi, I think you forgot the BAY area as well. I remember having looked at all the SMDC condos in that area a few years ago and many of these things - Coast Residences 24sqm, Breeze Residences 27sqm - sold for 3,2 PHP million each.

 

Looking at manilacondostore today, I have noticed that all these units are now suddenly PHP4,5 to PHP5,00 million each (manila bay view), so AGAIN a staggering price increase -- this is of course also because with this new price increase, the VAT becomes mandatory --

but it is my opinion, that they haven't built enough (small) condo's in the bay area to drive the price down...

I am very afraid that 24-27sq meter 3,2Million condo's in the bay area are a thing of the past, and will never return in my lifetime.

Of course, for the procastinators on this board, -- there is always this agent called Rob Luat -- who sometimes can sell you

one of these units "below" the market price.

 

Share this post


Link to post
Share on other sites

 

About that VAT menace...

. . .

I am very afraid that 24-27sq meter 3,2Million condo's in the bay area are a thing of the past, and will never return in my lifetime.

 

You can find them everywhere - but you need to look to the secondary market.

Example:

There are some nice 24 sqm 1 BR units available at Trevi (on Chino Roces, near Waltermart) at P 2 million and under.

(I have personally been inside two such units for sale recently)

 

But I do agree that the VAT changes will change the game.

 

Take the Condo that SMDC is planning to Build next to Rockwell: (this is alleged to be a render of it)

2000-2500 units, maybe

Screenshot_20170708_173353_01.png

 

Screenshot_20170708_174505_01.png

 

> see SSC: http://www.skyscrapercity.com/showthread.php?t=1922472&page=3

 

Here's a comment from there:

==============

"Rumor has it from an insider that SMDC is still undecided whether the project would be an SMDC Premier or a typical SMDC project.

On the other hand, the firm is really keen on having Non-VAT unit inventory for this project."

 

There will no longer be the need to build small, and build cheaper to keep the price under the P 3.2 million VAT threshold.

This strategy has been a key item behind SM's designs in recent years. But it has been getting harder and harder to achieve as prices push up.

Share this post


Link to post
Share on other sites

PH Peso is weak - Why?

Phil. Peso ... usPHP ... All Data : 2-years : 6-mos : 10-days / DXY : CNY vsPHP : MYRvsPHP :

sQKQMGj.gif

An article in Today's Philippines Star (pg B5) gives some good reasons

Peso Weakness - Good or Bad? - by Wilson Sy

He gives Six reasons why the PHP is weakening against an already-weak USD

+ Current account deficit, Weaker trade gap, slower than expected growth in OFW remittances,

+ War in Marawi, charts - the break of PHP 50 barrier, Narrowing yield differential, as US rates rise

 

Looking closer at the numbers, he observes:

+ Oil prices have stopped falling, and oil imports have a big impact of PH's trade balance

+ Auto purchases were front-ende to beat an excise price increase, and capital goods imports rose

+ Some investors shifted out of PH fixed income holdings

 

Peso weakness has a positive side:

+ Higher spending power for OFW's, and more competitive BPOs

+ Exports boosted, along with local manufacturing (enjoy pricing advantage relative imports)

+ Agriculture and tourism boosted; more jobs, and advantages for PH countryside

 

PSE-Index. / PH:PSEI ... All-data : 5-yr : 2-yr : 6-mo // All-Data-vs-PSE

dJFfaJo.gif

 

Philippines Stock Exch. / PH:PSE ... All-data : 5-yr : 2-yr : 6-mo :

FbsxwGd.gif

The weak peso has not hurt stocks - the index has remained stable.

In other countries, such as Japan, the weak yen helped their stock index

Since economic growth is the long term goal, short term weakness in the PHP may not be a bad thing,

so long as Du30's policies are helping the country's long term growth, They should do so.

Share this post


Link to post
Share on other sites

Good Views on growth. Bad News on debt.

.

470792183-537x350.png

 

Fitch sees PH growth at 6.6% in 5 5yrs

 

DEBT watcher Fitch Ratings said Philippine economic growth in the next five years could average above 6.5% as the country continued to hold a strong external position and macroeconomic fundamentals

 

+ Fitch thinks GDP will likely grow by 6.6 percent on average in the next five years

+ In 2017 alone, Fitch projects 6.8 percent, and 6.7 percent in 2018

+ This comes with: current acct. surpluses, high levels of int'l reserves, & low and declining external debt

+ Modest deficits of 0.3 percent of GDP in 2017, and 0.7 percent in 2018

+ Infrastructure spending was expected to be P847 billion in 2017, 5.3 percent of GDP

 

"The PH remains a net external creditor, at 13.3 percent of GDP, and this is stronger than BBB peer countries"

Fitch affirmed a BBB- rating in March, with a positive outlook, but has some concerns about disruptions from the Drug war on the economy

 

 

Govt debt up 7.9% at P 6.41 Trillion in June

 

NATIONAL government debt rose to P6.41 trillion in June as the government issued more securities and the peso continued weaker against the dollar

 

+ Domestic borrowings accounted for P4.18 tr - 65% : + 9.3% year-on-year

+ Foreign creditors provided ---------- P2.23 tr - 35% : + 5.2%, with debt values figured at P50.44, rather than P47

 

PSEi breaches 8,000 to close at a 1-year high, up 0.83% on the day to 8,037,51

With the Property index up 1.68% to 3,855.28 on Wednesday, as AyalaLand hit a new high.

 

(From the Manila Times, pg. B1)

Share this post


Link to post
Share on other sites

WHY the Peso is Weak in a year when the USD is weak too

 

Phil. Peso ... usPHP ... All Data : 2-years : 6-mos : 10-days /

mGilVxp.gif

 

Hot Money net outflow hits $457M yr-to-date

 

Reverses yr-earlier new inflow of $773,77M

 

FOREIGN portfolio investments in the Philippines so far this year registered a net outflow of $457.83 million as of mid-July

 

BPI's Lead economist, Emilio Neri Jr., blames the PHP weakness on:

+ "External factors... particularly policy normalization", but

+ Admitted there were also domestic issues, such as the Marawi City conflict and martial law in Mindanao

 

 

The EURO was stronger than the USD - up 15.5% (to over Php59) from the April low ... EurPhp : vs.UsdPhp :sTlC5RE.gif

 

Buffer gone? Time to borrow in FX?

Vanishing current account buffer raises Peso risk - Business World, 7/28, front page,

THE OUTLOOK for the Philippines peso - Asia's worst-performing currency - just keeps getting grimmer.

+ May's current account deficit was the worst since the data began in 1980
+ PH is headed for its first annual CA deficit in 15 years
+ With the buffer disappearing, PH wll have to borrow FX to replenish it
+ The deficit is expected to be $600Mn in 2017, and $!.6 bllion in 2018
+ Macquarie Bank economist, Idris, sees the Peso falling to 52 by year end

Share this post


Link to post
Share on other sites

TOPPING SIGNS - from at least one analyst

On 8/9/2017 at 6:49 AM, Euro Chocozone Buyer said:

Property prices are plateauing... according to Pinnacle.

(and they are basing on this the BSP Phil Real Estate index)

http://www.businessmirror.com.ph/housing-developments-continue-amid-plateauing-market-price/

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

 

iStock_000021561814XSmall2.jpg

"Make your hay while the sun shines"

TWO POINTS come to mind in reading that article:

/ 1 /

"Citing data from Bangko Sentral ng Pilipinas (BSP), Pinnacle Real Estate Consulting Services, Inc. (Precsi) Director of Research and Consulting Jojo Salas said that the country’s residential property values slightly grew by 1.1 percent in the first three months of this year, from the same period in 2016.

The Residential Real Estate Price Index edged higher by 1.3, from 115.9 in the January-to-March period last year to 117.2 in the similar quarter in 2017."

 

They must be looking at Secondhand prices rather that Primary (New) market prices - which the developers are pushing up at a dizzying pace

- like 10-15% per annum, or more!

/ 2 /

"Pinnacle’s study estimates that the units of residential condominium projects in Metro Manila could aggregate to 240,000 by December 31."

+ SM launching between 15,000 and 18,000 units this year
+ Ayala has 16 new projects underway, with P100 bn this year, and P40 bn of "housing inventory"

+ Megaworld has P146 billion of projects, with P30 bn in San Fernando, Pampanga
+ Vista Land has boosted its launches from P30 bn to P42 bn this year

The banks are being accommodating, with P1.31 trillion of loans extended in Q1-2017, up 21.5% yoy

Are developers pushing up prices so fast, because they are in a sort of panic-crisis mode and want to 'make money while the sun shines' - pushing up prices, to lock in as many high priced sales as they can, while hoping that some of the price rise will stick, and they will not need to cut prices below costs to make future sales.

If that is what is happening, the strategy may backfire...

Gun_Backfire.gif

BACKFIRING could happen if Buyers turn their backs on new projects, and instead seek out purchases in the (far cheaper) secondary market, where prices are often 15-20% cheaper, and even 25%-30%. cheaper or more. If banks decide that it is less risky for them to finance 60-70% of the cheaper secondhand price, than lending 60-70% of the expensive primary price - then the practice of cash buyers moving into to Secondary market could accelerate. Eventually, as the availability of lower prices and decent finance in the 2nd Market becomes widely recognized - then ALL smart buyers (including OFW's with a bit of savings) might decide they prefer genuine bargains to the "glitz" of buying a new property which will lock them into far higher mortgage payments.

Share this post


Link to post
Share on other sites

2Q-2017:

http://www.colliers.com/-/media/files/marketing%20reports/2q2017_colliers_quarterly_residential.pdf

 

Yes that same word "Plateau" has also appeared in the Colliers Ph residential report 2Q2017 for the first time.

 

It looks as if they re saying that the growth in capital values has come to a complete standstill in the CBDs.

They now advise investors to invest in the areas outside of the CBDs, the fringe areas, where they still can

expect some value appreciation. Despite this, the index for 3Br units in Makati reached a new -- all time ?? -- high

despite declining rents and rising vacancies.

 

I have seen the lower to mid end developers -- like DMCI and Emp East -- raise their preselling prices significantly

the last quarter, and I also see the lower bands in the Colliers indexes moving higher. I have also noticed that

the prices for Studio units are usually 10 to 15pct more expensive than similar 1Br to 2Br units in the same building.

To me this indicates growing wealth within Filipino households. Most of them now appear to have enough savings

for the downpayment (or full payment??) for a studio unit, but 1Br to 2Br units are still out of reach for most of them.

 

As most foreigners or Filipinos with access to foreign capital (thru marriage) buy 2Br, 3Br and luxury units with cash, and these

sales are not reflected in the BSP index, while most locals increasingly buy the now slightly more expenive (studio + 1Br) units

from the low to mid end developers with bank loans, I still expect the BSP index to move higher significantly later this year.

The BSP index should now rise faster than Colliers index.

 

The wild card will be the global economy. If we see the stock markets nosedive later this year, then all bets are off and we could

be in for a rude awakening.

Share this post


Link to post
Share on other sites

Q2-2017 Colliers Report

BYR9YCr.png: q1-chart : discontinuity! :

RENTS

Qtr /Yr. : Mak-Mid. Yield : Rent : QonQtr : YronYr / Lo-Makati- H / L-Bonfacio-H / L-Rockw- H /

2Q /2016 : 147.6k : 6.95% : 0,855 : - 1.16 %: - 0.11% / 0,580 - 1,130 / 0,660 - 1,050 /
3Q /2016 : 146.5k : 6.88% : 0,840 : - 1.75 %: - 4.00% / 0,570 - 1,110 / 0,655 - 1,040 /
4Q /2016 : 150.6k : 6.67% : 0,837 : - 0.36 %: - 5.21% / 0,560 - 1,100 / 0,640 - 1,020 / 0,780 - 1,070 :
1Q /2017 : 154.6k : 6.39% : 0,823 : - 1.67 %: - 4.86% / 0,560 - 1,080 / 0,630 - 1,000 / 0,760 - 1,050 :
2Q /2017 : 161.5k : 6.08% : 0,818 : - 0.71 %: - 4.33% / 0,540 - 1,080 / 0,610 - 1,010 / 0,760 - 1,010 :

==

CAPITAL Values
Qtr.: =========== Low- High: Mid-Pt. Pct: Adj.High: Mid-Pt./ L-Bonfacio-H: Mid.Pt. / L-Rockw- H: Mid.Pt.
OldQ2: MakMd.103.8-191.4: 147.58 : ----- : -------- =147.58 / 111.8-180.8= 147.3 / 120.4-200.0= 160.2 /
OldQ3: MakMd.103.0-190.0: 146.49 : ----- : -------- =146.49 / 109.8-177.6= 143.7 / 119.1-197.9= 158.5 /
Old-q4:
3Q - Mak-Mid. 084.0- 268.3: 176.15 :x78%: 208.98 =146.49 / 097.2-222.2= 159.7 / 170.8-206.3= 188.6 /
4Q - Mak-Mid. 109.0- 274.6: 191.80 :x70%: 192.22 =150.60 / 110.5-226.3= 168.4 / 188.4-207.7= 198.1 /
Old-q1:
4Q - Mak-Mid. 085.9- 274.5: 180.20 :x79%: 215.46 =150.60 / 110.5-226.3= 168.4 / 188.4-207.6= 198.1 /
1Q - Mak-Mid. 097.4- 274.5: 185.95 :x77%: 211.80 =154.60 / 110.5-235.5= 173.0 / 186.5-218.6= 202.6 /
New
1Q - Mak-Mid. 097.4- 274.5: 185.95 :x77%: 211.80 =154.60 / 110.5-235.5= 173.0 / 186.5-218.6= 202.6 /
2Q - Mak-Mid. 108.9- 274.5: 191.70 :x78%: 214.10 =161.50 / 110.5-236.2= 173.4 / 188.8-226.5= 207.7 /

===

2Q'18F MakM

Capital Values "plateau-ing"?

======
Colliers believes that the influx of new supply in areas outside the CBDs will redefine the condominium market
especially when they are all completed in 2020 onward. The growth in these alternative locations has also
impacted the rental and selling markets in major CBDs as it provides more options for tenants and buyers,
tempering rents and growth in capital values growth in CBDs
. . .
Furthermore, the potential of these alternative locations to usher in infrastructure developments makes them
viable options for investors looking for capital appreciation.

==
> Colliers-Q2-2017 : http://www.colliers.com/-/media/files/marketing%20reports/2q2017_colliers_quarterly_residential.pdf

Share this post


Link to post
Share on other sites

Well here is the first newspaper article about that 2Q 2017 report

 

http://www.entrepreneur.com.ph/news-and-events/buying-a-condo-for-investment-step-outside-cbds-where-prices-are-rising-faster-says-colliers-a00200-20170810?utm_source=Facebook-Entrep&utm_medium=Ownshare&utm_campaign=20170810-fbnp-news-and-events-says-colliers-fbfirst

 

excerpt: ""

Macaranas highlighted major developments in Pasig, Malugay Street in Makati and the Manila Bay Area with capital appreciation growth ranging from five percent to 21 percent quarter-on-quarter

""

Share this post


Link to post
Share on other sites

Yeah, I believe he may be talking about Primary market prices.

 

Colliers Philippines: Q2 2017 Property Market Report Highlights

 

I have seen no evidence that residential Rents are rising anywhere, and ultimately that is what will matter when those who own properties want to sell. (The Colliers video above cites a 1-3% drop in Residential rents, while Office rents are expected to rise 6-10%.)

 

If you have any evidence of rising rents, or secondary market prices, please share it.

 

My concern in Manila bay is the massive increase in supply coming there.

It may be hard to rent those places, because the main source growing source for tenants may be tourists, seeking short term accommodation.

But many buildings are making it tougher to let out properties for less tenancies of less than six months.

 

If prices hold up, they will just reclaim more land, and push out even more supply

 

New Manila Bay 2017

 

The video talks mainly about tourism

Will there really be high paying jobs there? Or just tourism and gaming jobs?

The video talks about connectivity, and ways of getting there - but I have seen the reality of Manila traffic jams,

so I am a skeptic.

 

Also SMDC has been talking about having their own hotels in the area, which might make provide competition for those seeking short term tenants.

Share this post


Link to post
Share on other sites
Guest
You are commenting as a guest. If you have an account, please sign in.
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

×