Euro Chocozone Buyer

Dr Bubb, when is the Philippine Real Estate market going to run out of bigger fools??? Is there a way to measure the number of bigger fools in PH real estate? I read somewhere that around 400,000 people could already qualify for a PHP1, TO php1,5Million loan, but for bigger amounts, you are looking at a very small number of bigger fools. (I mean local Philippines based individuals). Dr Bubb is a "numbers guy". Maybe he knows the exact number of bigger fools and based on this number one/he might be able to predict when the market will fall. Of course, it is made more difficult by the "international" fools who also operate in this market.

Greater Fools are the ones buying now / in edit, by drBubb: Here's a second video, where he gives reasons why Canadian prices MUST come down - basically, incomes and rents have to rise to sustain the higher prices. And the government may prefer to put restrictions on buying by Foreign Speculators, mainly from China / Real Estate "Breaking Point" - Prices MUST go Down!

There are still better deals available on the secondary market. Many Breeze residences units (27sq m units ) are sold on the secondary market for 3,6 - 3,7 - 3,8 million PHP, around PHP145K to PHP150K per square meter, (according to OLX.ph) while the official price is around PHP6- 6,2Million for units facing amenities/MNL Bay. The price per square meter around MOA is perhaps around PHP170K to PHP180K and likely not more for the moment. Anybody who is paying these developer prices is at risk of a big loss if the market heads south. It s an almost 50pct price difference between PRIMARY and SECONDARY markets, IMO. The facebook page MAKATI - BGC BROKERS has a lot of listings of units that are for sale in the secondary market and which are shared amongst these BROKERS.

http://bworldonline.com/q4-home-price-hike-biggest-in-three-quarters/ Q4 home price hike biggest in three quarters EXCERPTS: HOUSE PRICES rose faster in 2017’s last three months from a year ago, marking the biggest increase in three quarters as duplex and condominium prices surged by double-digit pace, according to data the Bangko Sentral ng Pilipinas (BSP) released on Wednesday. Prices rose by 5.7% year-on-year from October to December, clocking the fastest pace since a 6.5% climb in 2017’s first quarter, according to the latest BSP residential real estate price index (RREPI). The 2017 fourth-quarter pace compares to the preceding three months’ 1.8% and the year-ago 3.3% rise. On average, housing prices rose by 3.6% for the entire 2017, roughly flat from 2016. 2 / Central bank officials have noted sustained strong demand for commercial and living space in the Philippines, showing that price increases are driven by actual demand and allaying fears of a bubble. A bubble forms as a perceived rising demand for houses drives developers to build more units, and is said to “burst” as consumption stagnates and causes an abrupt drop in prices that could jolt exposed banks. The BSP limits a bank’s real estate exposure to 20% of its total loan portfolio. Philippine banks handed out P1.801 trillion in real estate loans last year, with home loans accounting for a third at P608.142 billion, according to latest available BSP data.

https://www.prosperna.com.ph/real-estate-bubble-philippines/ EXCERPT " Firstly and without a doubt, 2015 was the best time to buy especially Off Plan upmarket Condos. The average price for such a condo was around PhP 130,000 (USD $2,600) per square meter and in 2017 it’s now PhP 200,000 (USD $4,000) per square meter or higher with Ayala Land Premier and Rockwell Proscenium selling at an estimated PhP 270,000 per square meter and above. However, the average rental price for these condos is the same as 2015 and could even be argued that it is less, as more and more Pre-Selling Condos complete and their inventory becomes available on the market. For example, the Milano Residences, a Century City property, and the Park Terraces, an Ayala Land Premier property, both in Makati are good indicators of this. So what does this mean for a real estate investor? In simple terms, it means that in 2015, a real estate investor was getting about 8% net Yield and today an investor is probably getting only about a 5% net yield or even less if they buy at Rockwell or Park Terraces" (DrBubb: That's Nick Stuart, writing for Dennis Velasco's website - I know them both - had lunch with Nick recently.) > Prosperna thread on Mak-Prime

"There has been an "OFF THE RICHTER SCALE" price increase in condominium prices in the MM NCR. Part 2. Here is anecdotal evidence from Skyscrapercity that people accept the higher prices, and are keenly aware that they pay maybe 20-40pct more for new construction than a few years ago. 1) Shore 2 residences - SMDC http://www.skyscrapercity.com/showthread.php?t=1817408&page=3 Ang swerte ng mga early buyers nito. We got in really very late in the game. 24sqm 1 bedroom is priced at 5.3M (deducted na yung 10% promo nila now). Even if, we still reserved a unit..Just hope na Shore2 will still command good rental investment in future. 2) Prisma residencs - DMCI http://www.skyscrapercity.com/showthread.php?t=1842164&page=12 Just reserved a unit 1BR Type C for 3.7M already closing fees for Celeste Tower. Ok kaya? I regret missing the 1st tower last year. That's almost a Million increase today =/ So there are the stories of real people who admit and know that they re paying more for new units from the developer than a few years ago. FYI.

There's more to this. (from Ned Davis Research) http://info.ndr.com/demographics If you download the map of the globe you will see that most of the developed world has a red color. India, and most of Latin America have an orange color, and there are only 4 countries in the entire Eurasian landmass which have the green color: PH, Papua New Guinea, Afghanistan and Iraq. Most subsaharan countries are green as well. So Manila has been given the green light as well by this metric. Now I have read reports about real estate values collapsing in Toronto, NYC, London and all these "developed" places. So while they collapsed (and continue to collapse) into the abyss - RED COLOR -, MNL is still going strong. Maybe this is the message of this map. Remember: there has been an "off the richter scale" price increase in condominium unit prices in MM NCR in 4Q 2017, according to the BSP.

Manila to be the last 20th megapopulated city by 2100 in the entire Asean area / Developed World / North Asia / Europe / The Americas https://www.zerohedge.com/news/2017-06-27/mapping-worlds-20-most-populous-cities-2100 All the other megapopulated cities in the developed world will disappear due to population decline. ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ Well if you believe that people are "the wealth of a nation" than Manila should win it easily. Manila is the best of the KLAMNBD cities. K = Kolkata, Chennai, Karachi, Kabul, Cairo, Khartoom, Kinshasa, L = Lahore, Lagos, Lusaka, Lilongwe A = Addis Ababa M = Mumbai, Manila, Mogadishu N= Nairobi B = Bagdad, Blantyre City D = Delhi, Dhaka, Dar-es-Salam The fact that all the megacities in Europe, The Americas and North Asia drop off of this list does not bode well for long term real estate investments in these areas. Just my two cents...

http://www.bsp.gov.ph/statistics/keystat/rrepi.htm There has been an OFF THE RICHTER SCALE price increase in especially condominium units in 4Q 2017 The growth rate of prices of condominium units in NCR = YoY 15pct, QoQ 10.9pct. This is the highest growth rate I believe since they have created this index. Maybe this coincided with the top in the equity markets in late january and we could go down hard from here.

https://www.property24.com.ph/2-bedroom-condominium-for-sale-in-chino-roces-112369878 The price for RFO condos in SLP is PHP170,000 per square meter, - ON A rent to own basis - so it was indeed a 20pct increase. There's usually a 10pct discount for cash buyers, so the cash price is around PHP150,000 more or less. (for Emp East this is a first, -- I know Avida is already well over PHP200,000 per square meter in BGC) I have noticed that prices in the secondary market appear to be picking up as well. The ads for RESALE 3Br UNITS in SLPs -- and there were 3 of those -- have all disappeared. They only had a PHP110,000 per square meter price tag. (Bigger units are more difficult to sell) And this was the real deal, IMO. Another ad for a secondhand flat in Avida San Lorenzo, priced at PHP90K per square meter, posted a few weeks ago, disappeared within days of posting, so if the price is right, buyers could/might be found quickly. For those buyers it was truly NOW or NEVER. It is possible that these lower prices might NEVER again be seen, because new construction is so prohibitively expensive that intelligent buyers automatically will be forced to look at the secondary market. The market mechanism will likely do its work now. My guess is that secondary market prices are PHP115-120K for Avida San Lorenzo, and PHP130-135K for SLP, (up to 2-BR) and around PHP120K for 3Br units. Which confirms what Dr Bubb has been saying that if you go straight to the developer, you risk overpaying 20pct on average. And this was & still is the real deal in Chino Roces. Not the RED RIBBON RED residences. RED RIBBON offers are plasticized deals which could be a RED flag and become RED INKT. A 3BR slp UNIT which one seller - just a few weeks ago - on OLX.ph was offering for the ridiculously low price of PHP8Million for 77 square meter is a much better deal than RED Residences, IMO. 60pct cheaper than new construction. And it confirms his thesis, Chino Roces is becoming a HOT SPOT. So while 2017 saw a break out in BGC and The Bay Area, the 2018 break out SPOTS will be CHINO ROCES, ROXAS BLVD and BONI/SHAW. There are a lot of similarities between CHINO ROCES and ROXAS BLVD. Both serve as extensions of the main center. CHINO Roces offers SCHOOLS and TRANSPORT connections, and proximity to the BAY area. ROXAS blvd is the extension of the MOA business district. It offers Higher Buildings/ Sckyscrapers which paranaque cannot offer due to the airport, and it is less crowded than MoA.

Manila to be the last 20th megapopulated city by 2100 in the entire Asean area / Developed World https://www.zerohedge.com/news/2017-06-27/mapping-worlds-20-most-populous-cities-2100 All the other megapopulated cities in the developed world will disappear due to population decline.

Well it is still UNCONFIRMED, -- the first ads have appeared on olx.ph. https://www.olx.ph/item/very-affordable-rfo-condo-in-makati-san-lorenzo-place-connected-to-mag-ID8iZz1.html?h=51ad25b87a The price increases have been postponed for 2 days, and will start on march 18th 2018 according to this poster, who posted around 20 similar ads on olx.ph today announcing a 20 Pct price increase. https://www.olx.ph/item/2-bedroom-unit-in-makati-ayala-near-buendia-magallanes-26k-monthly-3-ID8iZD1.html?h=51ad25b87a https://www.olx.ph/item/san-lorenzo-place-1br-18k-monthly-300k-dp-to-move-in-26-sqm-near-in-ay-ID8iZDW.html?h=51ad25b87a There then is already another poster whos ads are unclear at the moment. 1Br 26sqm will cost 4,3M, 2Br 38sqm costs 6,3M, that is around PHP165,000 per square meter, which is a 20pct rise in the stardard price. We will now have to wait until monday for further confirmation, but this is a move that is entirely understandable. (However he says 10pct downpayment but then lists 300K downpayment on a 4,3Million unit, -- that downpayment is only 6pct). So it looks like saturday march 17th will still be NOW and march 18th will be NEVER. Empire East management had to take into account market forces. They are a listed company and have responsibilities to shareholders. So the market forced them to raise prices. This is my idea. However I do not believe that they have that much units available, so this price increase is more of a marketing and PR stunt. By pricing their units around 10pct below the starting prices of the new developments that are coming, they are maximizing their last revenue stream from this project. A 165K RFO unit in SLP is a much better value than a 265K Red Residences unit or 180k Avida Wyeth unit. The biggest opportunities will now come from the secondary market, -- the tangible market -- as I have seen some ads from SLP units on the facebook pages of REMAX LYONS and INVEST IS THE BEST. And there are still 3BR units ON SLP listed on olx.ph for only PHP110K. https://www.facebook.com/profile.php?id=100007641678586 https://www.facebook.com/investisthebest/ The other big development to look out for is FORTIS GARDEN, and I believe it will be priced at between PHP165,000 and PHP180,000 per square meter, because their projects in Mandaluyong are already close to PHP120K per square meter now. This is the most telegraphed project launch in all of PH, -- they have telegraphed this years in advance -- and I have even met people who told me they were going to invest there. They have already created a massive interest in the project NOW so this price is going to be HIGH.

There was an interesting comment on SSC regarding RED RESIDENCES. http://www.skyscrapercity.com/showpost.php?p=146302031&postcount=29 """" SMDC and Megaworld are working with Chinese brokers on "special bulk purchase deals". Example: In Dec 2017, SMDC remaining Jazz inventory were valued at ~240k/sqm. Chinese brokers started distributing "special cash deal" with discounts of 30%-35% that lowered the selling price to ~160k-170k/sqm. This allows Chinese brokers to market "great deals" to their customers. This allows developers to get higher prices for their inventory (Jazz are going ~130-140k/sqm in resale market). This makes the Chinese buyers feel happy that they got a big discount and a great deal. __________________ """"" Apparently one large Chinese buyer bought the entire RED RESIDENCES building but SMDC did not allow this. Still Chinese groups are buying huge inventories of newly launched buildings (DMCI Fairlane also experienced this I read), and part of the marketing strategy is to massive inflate newly launched unit prices. Those units are then sold to Chinese buyers at a 30pct discount, who then believe they are getting a good deal. But this then leaves me to wonder. Why can the Chinese buyers get a bigger discount, and why do the poor Filipinos have to pay those massively inflated prices??? This is economic imperialism.

Here is the link It a 20 18 hit. A hit in your pocket. Around 2013-2014, San Lorenzo Place was about 10-15 pct more expensive than Avida San Lorenzo and Leaureno di Trevi, I remember, but now in 2018, Empire East is about 15pct cheaper than Avida Wyeth and Red Residences. (180K and 260K respectively for the latter 2). So just to arrive at a same price level as Avida Wyeth, San Lorenzo Place unit prices have to increase by about 20pct. If Avida Wyeth price will be 180K and the current SLP price is 145,000 for RFO units, then a 20pct price increase will just mean that SLP prices will be at the same level as Avida Wyeth. And then I do not even talk of Red Residences which is a 260K per square meter building. Conclusion. A 20pct price increase is warranted, -- and a case can be made that a 28pct price increase is possible because that would rectify the current situation so that SLP would be 10pct more expensive than Avida, which was the historical norm and also because SLP has the MRT connection. There appear to be very few freely available units in SLP. There are drawlots and lotteries going on for the remaining units. So isn't this a market signal that they're selling their units too cheaply???

San Lorenzo Place. It is NOW or NEVER. https://www.olx.ph/item/mrt-magallanes-san-lorenzo-place-until-03-13-18-8pm-only-ID8iCss.html?h=42454914d3 The question is how Empire East will react to the surrounding price increases on Chino Roces. Empire East used to be the most expensive developer (price/quality wise), but now that Red Residences and Avida Wyeth are being launched at significantly higher prices, it will be interesting to see how much the real price increase will be. Most of the ads for SLP on olx.ph are scams, -- there appear to be very few individual owners who are selling --.that is what I have observed so far. So the big day will be March 16th and we will know how they will react. According to the above seller, it is NOW or NEVER, and I have seen rumors of a WHOPPING 20pct price increase. Procastinators, this might be the last time in your life that you might see such LOW prices. So it looks as if Chino Roces is becoming another HOT SPOT.

It's out. 4Q 2017 Residential report from Colliers. http://www.colliers.com/-/media/files/marketing reports/4q2017_colliers_quarterly_residential.pdf Rents down. Prices up. They still forecast Makati 3Br condo price to increase by 13,8pct from 4Q2017 to 4Q2018. The lower band for 3Br is PHP110,300 per square meter. When I checked the ads on OLX.ph I found the San Lorenzo Place units -- and there are 3 of them - offered for around PHP110,300 per square meter (8,5M instead of the 11,5M market price). And these are just asking prices for the secondary market. Real prices will probably be lower. (Maybe that is the way these indexes are calculated?? -- just by looking at olx.ph and guessing the market...) https://www.olx.ph/item/last-2br-unit-san-lorenzo-place-makati-city-air-jazz-rise-residences-ID8gwPR.html?h=622437d62d&utm_source=Opt_Var_1&utm_campaign=VDay2018_B On the other hand, just today a newer ad was posted and for the first time ever, a 38 square meter San Lorenzo Place unit was offered by an Empire East seller for 6,5Million which amounts to around PHP172,000 per square meter. This is a new record. (there is an annual price increase for most EmpEast projects this february 16th) Just like in Hong Kong, my impression is that the smaller units are rising faster in value than the bigger units, because there s more people who can afford smaller properties and fewer who can afford bigger properties. All units 1Br and studios in the Ellis were sold already, the only thing left is 2BR, 2Br link and 1BR executive i have been told. http://systemisbroken.blogspot.com/2018/01/the-relentless-climb-of-hong-kong-real.html (In HK it is the smaller sized units which are breaking all records) (interestingly in his latest insight the writer says there is dramatic underinvestment in housing in USA, causing future price rises over there. IN MNL there is way too much investment) The same is also true for the Bay Area where SMDC raised the price for most 27square meter Breeze units from 5M to 6M. (it is quite unusual that prices are still rising despite this development completed in 2Q-3Q 2017) (usually when buildings are completed prices fall but for Breeze they are still rising). And the newer Megaworld development in the Bay Area has an average square meter price of PHP250,000 according to Rob Luats facebook page affirming my conviction that developers have not built enough units to dampen speculative - false? - demand. They really need to build something like 15,000 to 20,000 units a year to cool this, but they are now waiting for the secondary market prices to pick up. The question is whether the decline in the value of the PHP against most currencies, as well as the inflation rate which is running at 4pct now, is going to be a bigger driver in future pricing than a possible stock market crash, which might become increasing likely in the months ahead, and we will have to see which forces are bigger. But any steep fall will no doubt have severe psychological impacts in the red hot PH real estate market. PH will probably muddle thru this nicely. But 13pct price appreciation is just too optimistic in my opinion. (Pssst. 13pct for Makati is too much. But not for Breeze. I Expect the SMDC Official price of 27sqm Breeze units to reach 7M by the end of 2018. Still hopefull we can reach 10M by early 2020.)

A possible explanation for SM Corporation stock outperformance. ===== PH: Smph / SM Prime Holdings Inc. ... All-data : Latest: P35.90 (12/6/2017) /range: 26.20 to 38.25 ===== SMDC is the leading property developer in the Bay Area, and the fact that the stock is the strongest amongst all the major developers is another indication that the Bay Area is becoming the new "BGC", or the new "Makati". While Ayala Land and Megaworld stock price has only recently reached their 2013-2014 heights, SM Holdings has gone straight up. There is a strong secondary market for SMDC and Federal Land condos in the Bay Areas. A 27sq meter condo in Breeze residences which a few years ago could be acquired for 3,2M PHP now has an official 5,4M PHP price tag, and can be sold on the secondary market for about 4 to 4,2Million PHP.

http://www.colliers.com/-/media/files/marketing%20reports/3q2017_colliers_quarterly_residential.pdf Everybody's favorite -- the Residential Market - is up 1pct QonQ in the 3rd Q of 2017, with rents down 1pct. Vacancies are expected to rise to the midteens until mid-end 2018, then decline into single digits by the end of 2019. That's it. No oversupply according to Colliers...

A new all time high for the condo units in NCR http://www.bsp.gov.ph/statistics/keystat/rrepi.htm Condo unit index NCR 122,3 Q1 2017 to 125,8 Q2 2017 Growth rate Q to Q: 2,9pct, -- that's almost 11pct on a yearly basis. So much for the slow bursting of the property bubble. It rather looks like the slowly inflating property bubble is unstoppable. This is an indication that the secondary market is picking up, and following the price rises of the primary market.

Well that is exactly my point. I just read on facebook, Shore 3 residences (tower 4) from SMDC was launched august 18th. In 10 days they sold around 500 units from the 600 units in that building, so it is almost completely sold out in a matter of days. https://www.facebook.com/christianiyann?hc_ref=ARR8-JjsnreHsPdsCX5VY7SRFcfw7-p3u9TVnM4_dhUD0NOX6wg1fDMHCfdFOMAMXRg&fref=nf&pnref=story I wish they had released more stock in the Bay Area because the price per square meter is now around PHP240,000 -- that's almost the Ayala Premier price of a couple of years ago in various areas. http://www.manilacondostore.com/shore-3-residences So for all of you out there -- procastinators or lookers or hesitators or whatever -- the Bay Area is now more expensive than BGC and even Makati, because a nice project like the Rise Makati is "struggling" to sell its units at PHP190,000 per square meter for studio units, and it cannot even match Shore 3. This is the first time that I see the php245K-php250K price per square meter on ordinary condos from SMDC. -- There is nothing special about these condos. They're just a mass housing project in a nice location.

http://www.malaya.com.ph/business-news/business/condo-buyers-pay-hefty-price-parking An article about parking slots which appear to be getting more expensive all the time...

http://www.philstar.com/business/2017/09/04/1735490/peso-euro-rate-weakens-17-year-date

More investors are using AirBnB to rent out their condos https://investkabayan.com/airbnb-investors-ticket-to-stream-of-passive-income 13,000 active AirBNB listings in PH

Are we overbuilding???? http://business.inquirer.net/236183/are-we-overbuilding