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BUBBLE Debate: Is there a Bubble in PH Property?

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CAN IT HAPPEN in the Philippines? 

Seems impossible now.  But is it?

Frank Zappa - It Can't Happen Here / Album:Freak Out! (1966)

Hong Kong Real Estate Prices Fall Most Since 2008

  • The monthly home price index fell 3.5 per cent to 366.3 in November, up from 2.56 per cent in October
  • Largest fall in a single month since November 2008

Prices of lived-in homes in Hong Kong saw the sharpest decline in a single month in November since the global financial crisis in 2008.

HK$ per sq ft of saleable area : Nov 2018 HK$22,714 : 

wYg2By9.png

Source: Midland Realty

The monthly home price index, which represents movements in the secondary property market, fell 3.5 per cent to 366.3 in November, compared to the 2.56 per cent slide in October, 1.27 per cent in September and 0.05 per cent in August, according to data from the Rating and Valuation Department.

Home prices have slumped 7.2 per cent after peaking in July following a 28-month surge starting in April 2016,

. . . “It is the largest fall in a single month since November 2008,” said Derek Chan, head of research at Ricacrop Properties.

Home price plunged 8.22 per cent in November 2008 and hit the year’s low of 104.8 in December. After a three-month decline, home prices began to rebound in January 2009.

A number of investment banks and analysts have forecast that property prices will continue to fall, with some predicting declines of as much as 25 per cent next year.

Denis Ma, head of research at property consultants JLL, expects home prices to fall at least 15 per cent in 2019.

(PRIMARY Prices UNDER Second hand):

“Part of the reason why prices fell at a faster rate in November was because developers started putting more projects on to the market in the previous months. The flurry of new launches has seen sell-through rates fall as developers also scrambled to find buyers,” Ma said.

Buying interest also remained weak.

“Home sales in the secondary market plunged 67 per cent over the weekend with just one flat sold,” said Willy Liu, a director at Ricacrop Properties, which monitors 10 major housing estates in Hong Kong.

Sino Land has been offering flats at its Grand Central development in Kwun Tong at prices that are 14 per cent lower compared to those nearby, luring home seekers away from the secondary market.

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BUBBLE BURSTING DEFERRED!

Falling Libor rates "saved" Philippine Property stocks

: Update : SMPH: P39.00 / ALI: P44.35 / MEG: P5.00 / DLBR: 18.80

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SMPH: P39.00

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Foreign investors looking to invest in the Philippines will be very aware of Libor rates.

And there will be a correlation between US Libor and interest rate pressures in PHL.

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POGOs to drive PHL property mart, but challenges seen

REAL ESTATE consultancy JLL Philippines said China’s contributions to the Philippine real estate market are critical, noting how the presence of Philippine Offshore Gaming Operators (POGOs) offset the slowdown of business process outsourcing (BPO) companies’ expansion in 2018.

+ increasing presence of Chinese nationals employed by POGOs in the Manila Bay Area. With more POGOs operating in Metro Manila, their employees have also started occupying nearby residential developments.

+ a surge in demand for residential properties in the Bay Area and nearby business districts, panelists during Lamudi’s round table discussion noted

+ taking in POGOs as tenants has been challenging.

“It’s true that the POGO employee is not necessarily the most dedicated, most likely don’t speak English….Ultimately you need a certain discipline,” Mr. Vicic said.

For Anchor Land Holdings, Inc. (ALHI) President Digna Elizabeth L. Ventura, having Chinese tenants means cooperating with POGOs to ensure their workers comply with building rules. “We’re working closely with the operator and making sure that the property management controls the situation and makes these people follow the rules,” Ms. Ventura said during the round table discussion. Mr. Vicic said they are recommending that landlords keep a balanced mix of tenants in their properties, given the challenging nature of POGOs.

+ RENTS & ...

Prices have accordingly risen following the surge in demand for residential projects in the Bay Area. With this, JLL Philippines Head of Research and Consulting Janlo delos Reyes said that local property buyers are being pushed toward the fringes.

“Prices are at around P300,000 per square meter, and that’s comparable to Makati and Bonifacio Global City. What’s happening is the Bay Area is pushing the domestic market away from that community, not only in terms of the sale but also in terms of the rents,” Mr. delos Reyes said.

“The local market is unable to keep up with that kind of pricing. Some of them are being pushed toward the fringes and other areas.”

avida-towers-prime-taft-avida-towers-pri

> SO: Old MOA tenants are moving to "fringe" places like Taft Avenue, where prices & rents were lower.  Avida has a big project there called PRIME TAFT

Lamudi Philippines Chief Executive Officer Bhavna Suresh said that moving toward the provinces will be good for the country in the future.

“The only flip side there is infrastructure needs to catch up, we need to move our offices to these outskirt areas too,” Ms. Suresh said.

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Strong demand for condos, worker dorms seen this year

BusinessWorld Online-1 Jan 2019
The worsening traffic in Metro Manila is pushing young ... Meanwhile, the luxury condominium market shows no signs of slowing, ... business districts such as the Manila Bay Area,” Mr. Bondoc noted. ... a volatile interest rate environment should entice local developers to ... 2018 BusinessWorld Publishing.

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DANGEROUS CRACKS in New buildings? 

Expert warns Australia could turn into slums in 20 years | 60 Minutes Australia

"there was a threat of it maybe falling over... just 4 months after it opened"

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