Euro Chocozone Buyer

The British??? One video from a British national about the property rental business. And another one from a British property broker, called Reality Homes. So I am starting to see more foreigners.

More data from the 5th Asia Pacific Real Estate investment summit... FYI. https://www.5apreisp.com/copy-of-pillars https://media.wix.com/ugd/d3b88a_77c598289276488aa6b5953570969f3c.pdf

http://www.entrepreneur.com.ph/news-and-events/rising-prices-falling-rents-outlook-for-residential-condos-in-2017-a1672-20170220 Prices of luxury condos could climb by up to 36% while rents may drop by 6.4% in 2017 Well I thought this "waiting for a greater fool" was one of the hallmarks of a speculative bubble. Who are these buyers who fork over PHP200K and up for tiny flats?? They can't be all end users, in my opinion.

https://www.facebook.com/robluat?fref=ts (the march 20th offering) Sacrifice Sale -- Sale below market value Apparently these agents think that the developers "determine" the market value, but it is the FREE interaction between buyers and ALL sellers where the price is formed, more so on the "secondary market". Perhaps the stock reflects the growing mismatch between the take up in the preselling market and the secondary market. (38K units in preselling/ 2K in the secondary market) What that basically means is that there are too few participants with cash funds in the secondary market and:or too much speculative buying; Or to say it differenty: the market is completely illiquid. Your only option -- if you can't sell it on completion -- would be to rent out your unit, but even that is becoming more difficult -- according to Colliers. In any case -- I thought I had made 100 Grand USD on my Times Square West unit -- but that's only "an illusionary paper profit" at the moment. Still when I look at the Six Senses Resort development, I notice that preselling prices for a 54square meter 2BR unit are now in the 200K per square meter price range, almost the same as Park Avenue, and almost half of the units in the last tower, tower 6, appear to have been sold. Why are these people paying PHP200K per square meter for a non existential flat that will be ready within 4-5 years when they can buy a flat on the secondary market for about PHP150-160K and no waiting period????

Philippine Peso Is Worst Asian Currency in 2017 VIDEO: https://www.bloomberg.com/news/videos/2017-03-24/philippine-peso-is-worst-asian-currency-in-2017-video

A ha, suddenly they are also talking about the fringe areas where prices are about 10 to 15pct lower than the CBD.

Yes Axel Merk is more my favorite. But even he does not see long term value in the Euro. The EURO might rise temporarily due to stock market weakness. And the euro is (the favorite) carry trade funding currency now --- so if there are liquidations, there's going to be a tremendous demand for EUROs/ Peter Shiff is a perpetual dollar hater -- you are correct. Perhaps because he (might have?) had German ancestors. I think EURPHP can over the course of this year and next year rally back to the old 59-60 area, and then it will be over. My long term targets are 40 then 30 then 20. This would imply that a massive EURO devaluation is coming. Anyway the currency is the barometer as well, -- and the PHP currency will sooner or later reflect that, as it will start to rise against all Major currencies.

Some advice for the first time condo buyer in PH I am starting to see many foreigners buying in MNL and Thailand by the way... the number of youtube videos on this subject is growing quickly

The average price per square meter for Hong Kong city inner city regions is around USD34.500 per square meter. That means a tiny 40 square meter condo will cost 1,376,000 USD. Housing is now deemed as extremely unaffordable "I would only buy if prices were 40 to 50pct lower than what they are now" I expect that HK property prices will decline in 2017" According to this youtube blogger...

They are coming to take advantage of free healthcare, and free education Yes this is precisely the ILLUSION that many would be immigrants to the USA have, because BOTH the health care and education system in USA is the most expensive in the world. And it is so because it is a "racket" according to Charles Huge Smith. And it is a racket because it is no longer FREE. In any case the border adjust(ment) tax might clobber the dollar according to Peter Shiff, At least Rody is going to build more bridges over the Pasig river, (let s hope there will be one Pasig/Mandaluyong BGC brigde), and this is at least better than the worthless walls and increased military spending which "false" prophet Trump has promised. California is now going to punish companies that help build this wall. http://investmentresearchdynamics.com/the-west-is-collapsing-as-the-east-ascends/ History is rife with empires that tried to build walls - the China Wall / the Roman empire / The Iron Curtain -- they all fell because they collapsed from WITHIN, so history is on my side. (Rody also indicated he was willing to accept Syrian refugees so PH continues its open border policies --- PH is the new America). As the USD weakens, so will the PHP, but it will not weaken as much as USD. For EUR and non USD based investors, this might be the last time to grab PHP assets this cheaply. The weakening PHP will also likely stoke more inflation, and it might mitigate the PHP price declines in MNL real estate For overseas based investors, this is a "fortunate" event because PHP assets will likely become cheaper now for the next 2-3 years due to PHP currency weakness as a result of these "false prophets".It will probably reverse when the next USA president - almost certainly a democrat - will be chosen in 2020, because quite ironically the democrats have more fiscal restraint than the republicans. Then the USD and PHP rally will resume, and as PH will become one of the wealtiest nations, it will be reflected in a much stronger PHP, which will likely rise against ALL currencies.

http://www.philstar.com/business/2017/03/21/1682979/foreign-investments-seen-sustain-upsurge My own opinion is that it is USD weakness which is causing PHP weakness, because as you can see -- long term investors are still increasing their PH bets. PH is a (net) import country so higher raw materials prices cause the currency to weaken more than those of its more commodities exporting neighbors. Personally I see both Trump and DU30 as one time presidents -- an unfortunate choice -- but the democrats USA and the liberal party PH will emerge as the winners in the next elections of both respective countries. Trump is a complete disaster. What made America great - above anything else - is immigration and he's closing that door. Trump would better follow Ronald Reagan's advice "Tear down that wall". The Wall usually foretells the end of an empire. Cooler heads will prevail in the next election as the drug war cannot be won by slaughtering thousands of people. Disappointment will set in as more DU30 promises will be broken and war fatigue will set in. Both presidents see people as the problem. But people are the SOLUTION. The problem is only in their head, -- the wall builder -- and the killer.

http://www.gmanetwork.com/news/story/500918/money/infographic-where-26-92b-of-ofw-remittances-come-from Last year, or the year before, when the USD was very strong, PHP was the strongest emerging market currency, having dropped the least against the dollar, and this year, while the dollar has weakened, PHP has likewise weakened. And I read that over 50pct of all remittances come from USA, so any USD weakening is immediately followed by PHP weakening as USD and PHP are almost (intimately) linked. Every US navy vessel has at least one PH soldier so they are linked. https://www.facebook.com/photo.php?fbid=10209956160474674&set=gm.1288064214619325&type=3&theater Much chagrin on the "Asian Alliance Against China" facebook page visitors due to the huge interest charges that need to be paid back to China in RMB, I believe this is a very smart move by DU30 as China's currency is going to depreciate very slowly over time against PHP, and probably more so than USD/PHP. So I tend to believe that the 6pct RMB loan is a better deal than the 3pct Worldbank USD loan.

HI I believe it will be a temporary upward climb - call it trend - because I see a lot of price increases. SMDC raised prices for all its projects about 3 to 5pct in 1Q 2017, then there's the Federal Land "hyperinflationary" BGC increase, there is the fact that DMCI pasig - and mandaluyong projects are now starting at close to PHP80.000 per square meter (instead of the PHP67,000 a few years ago), and there s property 101 sunshine upcoming price increase, so there's a good possibilty that this index might hit new all time highs in 1Q 2017. I definitely expect some "cooling" of this index to more reasonable levels as the stock market might peak around the end of 2Q or the beginning of 3Q 2017, and any type of crash in the stock market and global economy will have ripple effects on the PH property market so it will be tougher by year end I believe. The video below talks about the "fringes", and Pasig/Mandaluyong are the fringes of BGC (north), so that's where the appreciation appears to be taking place. Not in Makati. Makati is history. Any index which uses only Makati data as a benchmark for the entire PH is completely irrelevant in my opinion.

Philippine House Prices have resumed their relentless upward climb http://systemisbroken.blogspot.com Hi Our friend from "the system is broken" has just recently released a new chart and this charts shows that despite the advice of all the experts, "residential prices" are rallying again in PH -- against all expectations (I might add). So it appears "the system is NOT broken" I am guessing which data he used to compile this index, but I suppose that it is the index used by the central bank of the philippines. Most likely this index is at least partly composed of prices of newly launched properties. So that is only the 4th Q2016 and I know with certainty that there will be the "outlier" Federal Land 8 Park Avenue - almost hyperinflationary price increase - as well as price rises for selected DMCI projects in Pasig -- so it is possible that we will break into a new all time high in Q1 2017. (I am even reading complaints on SSC about the price escalations in selected DMCI projects) So much for the advice of all the experts. Maybe this chart is just a "sell fullfilling prophesy". After all, the Philipppine Central Bank follows a "demand driven" model, and maybe they've compiled/designed this index in such a way to justify their ideas about the direction of the market. But then they guys are bankers, -- it is in their interest to present the data "honestly". In any case, inflation is accelerating, PH will move from a low income to a medium to possibly a high income country by 2040, according to some reports so the PH housing bears got slaughtered again.

The(ir) Azure North project appears to be delayed. Construction will only start in 2Q 2017 and the first building should be ready by may 2019.

http://www.colliers.com/-/media/3q2016_residential_report.pdf 3Q Update

Currency devaluations and revaluations also play a role Hi - follwing Brexit - the GBP lost value against USD as well as PHP, so that must have had an impact. The euro strengthened from the low EURPHP46.8 in march 2015 to around EURPHP53.5 now. So that also helps to explain the lower value of the remittances, i.e. the strength of PHP. Then some other - oil producting ? - countries like Kuwait saw huge gains, while Italy and Greece contracted massively indicating severe economic stress in those countries.

http://www.philstar.com/business/2016/09/19/1625021/soft-remittances-persist-bsp Remittance flows are slowing down. Must be hurting property developers...

Well, the data comes from the Philippine Central Bank, they have developed their own indexes and you can clearly see that non-CBD district prices are still in an uptrend. That was menioned on systemisbroken.blogspot.com. The blogger of this URL is very much confused by this as he had expected prices to fall by now... he doesn't know what will happen now... http://systemisbroken.blogspot.com

http://systemisbroken.blogspot.com The broader market in the leading indicator. Hi the latest blogpost from our friend in the abovementioned blog describes the state of the PH property market. He is a bit surprised by the strength of the non NCR market, because it is the clear that it is only the prime areas MAK-BGC which are taking hits and have experienced some price declines. In any case the price development and forecast for PH and CHINA is completely the opposite. In China only TIER1 cities are still rising, TIER2 cities have stabilized while TIER3 and rural countryside prices have collapsed, and I have no doubt that the overall market is extremely weak in CH, and that this China bubble will pop soon, and that it is the overall, broader market which forecasts this decline. Similarly, in PH, we are now in the strange situation where the prime markets are declining, but where the overall, broader market is still rallying, and my explanation for this fact might just be that it is the foreigners themselves who are in trouble. Their home economies are not doing well, and they were faced with significant appreciation the last 3-4 years in PH home prices, plus a 20 per cent PHP appreciation against the major currencies, except USD, so the time for a healty pullback in an overall bullish market has arrived. Demographics play a role in both countries, the major group is 35-40 old plus people and older people in CH, and older people prefer to live in the bigger cities, which is why their TIER1 cities are still performing very well, while for PH, the biggest group in the 20-30 years old people and they very much prefer to live in the suburbs and condo buying is not very much on their mind - yet, - Lamudi had done a study on this I believe -- but it is coming. In any case, the bullish argument is the overall broader market which is still rallying and the bulls can take solace in that. So -- to answer a question that was raised here before -- will foreigners rescue PH real estate market -- the answer is NO, --- they are in trouble themselves and it is the locals who are taking over leadership. A mixed portfolio that is invested in all areas of the NCR and the country, and in all segments like Middle Class and Lower upper class will still end positive for the year, while a portfolio that is exclusively invested in BCG-MAK high end assets might see some value erosion this year.

Century, Megaworld, Ayala and DMCI, which company is "better" managed. Hi I still think Century will be a turnaround story as they are now going to concentrate more on the lower end of the market. The Azure North project - has seen significant appreciation since its launch -- and I think they are getting the signal. Location wise Megaworld and Empire East, one of their sister companies, to me looks like the best managed company because actually Empire East project is very expensive, I mean they are maximizing shareholder value to the extreme, and Megaworld is trying to deliver Ayaland Premier quality at Alveo prices, -- and some of their projects are really low density projects which will always attract massive interest. So Megaworld will hold up better than Ayala Land, I.M.O. Ayala Land will likely be hit more than Megaworld as they are resting on their laurels, -- and some of their projects are delayed significantly. And I guess most their profit comes from the high end part Ayaland Land Premier, and this is where I expect the hits to come, so Ayala's share price will suffer more than Megaworld IMO. Ayala is too much mass focused on high end, -- MEG understand that you cannot market High end projects as mass housing projects which is what Ayala and increasingly Alveo are doing. The lower end is growing more rapidly and Empire East products are more expensive than Avidalands products so even here MEG has an advantage. DMCI is an extremely unprofessionally managed company. I mean some of their projects get sold out within 1-2 months of their launch, -- don't they get the impression that they're selling their product below market value? And they have mining operations as well, which is an industry engulfed in deflation. Some DMCI projects like Illuminia residences, 2BR units and 3Br units are sold with heavy discounts like 10-12pct I believe, so they must a have a huge stock overhang on their bad locations, and here a value investor who offers cash might get big discounts. Looks like a typical Filipino company which destroys shareholders value. The price is almost the same in every location for most of their projects which I find strange, and their new -first high end - project OAK residences in Paranaque, I predict it will be a failure. The design is too similar to their mass housing projects, -- how can they expect to sell this for 120K per square meter?? I mean their Oak harbor residences projects which will be launched soon. Lastly share prices are very much influenced by sentiment and international markets, and might crash following international markets, while their underlying property values might hold up much better due to better localized demand and supply. So that is why I expect, CPG turnaround, MEG holding up better than Ayala, DMCI continue to underperform due to destroying shareholder value, and not following market signals. MEGAWORLD is best managed for shareholder value, IMO. Ayala will come under severe stress IMO. Ayala is the next CPG.

What do you make of this? Read a report that Megaworld is rumored to have another price increase this september 1st. (and that follows another move early july when they also raised I believe) https://www.facebook.com/megaworldmcbd.yap?fref=ts How can they raise the prices when -- according to your models, and your and Colliers data -- prices should fall slightly? Is it only to fool the current investors that everything's ok, while the market is collapsing beneath them?? Or is it a genuine move that indicates that they're selling their inventory too fast and that they have to adjust the price to keep up with rising demand?? (and with the rise in land values which you have documented). Is this move genuine, real and based on market signals or just a false signal to create a feeling of euphoria amongst its current investors while hiding the bloodbath in the real world? I want answers.

Faulty reasoning "" It is interesting to see that Office Rents (+0.78%) and Capital Values (+2.58%) have gone on rising, while Residential Rents and Capital Values have begun to fall "" This is not true of the entire residential real estate market in PH, I mean Ortigas and probably all the other areas in PH are still in a long term uptrend, even though they're rising only very modestly. Brixton's Place is rumored to have a small price increase, as well as Viera's, so there's ample evidence that in the mid to lower end prices are slightly rising, and let's not forget that the great majority of MM lives in QZ-Ortigas so the overall market is still in an uptrend. It is very similar to the 2000 Nasdaq + Dow Jones TOP. What really happened then - if I am not mistaken -- is that the small and midcaps, the wilshire 5000 and Rus 2000 never really crashed, and went on to make new highs. So the bulls can still claim that even the residential market overall is still in a very modest uptrend. The reason why MAK/BGC has declined might be due to the fact that they attract more overseas investment and as all overseas economies everywhere experience growth pains, that pain is being felt the most where overseas capital invests the most, precisely MAK+BGC. You are saying that the entire market is slowing down but the facts do not support your statement. So your statement - I feel - is not representative of the overall picture for most average filipinos because they will soon be hit by price increases of DMCI and other lower to middle end developers who appear to have a brisk business. There's only 1 reason why land values are increasing, -- as there is only 1 fundamental driver for property prices -- and that is because more people are bidding for the same amount of assets, and land values reflect that process the best. It happened in many countries. The wave process, the people == this is the fundamental driver, not the cycle. But it is a cycle that has repeated itself in many Asian countries, and it is just getting started in PH. +Land values up +Overall residential prices, -- the broad indices - still up +Office rents: spiking up despite big supply growth +Retail rents: up despite forecast 8pct supply growth 1H2016. Now I forecast stable residential rents for 3Q for MAK/BGC and 1pct growth in rental prices 4Q, so yearly rental growth mak:bgc: around -1 to -1,5pct For Ortigas the yearly residential rental growth will be around 3pct. Overall -- the broad indexes -- remain in an uptrend. Extremely healthy in fact, when there is a rotation in leadership. That also indicates broader participation IMO. I'd be more worried if land prices started to fall, or the broader residential market started to fall, or office prices started to decline rapidly, or retail rents, -- but that's not happening. When a baby is conceived the first 9 months you will see the biggest phenomenal growth rate. Likewise, an economy, which is nothing more than a gathering of people - will experience its most rapid growth 9-10 years after the birth peak. And it is just getting started for PH. That's what Patrick Schwerdtfeger talks about in his Keynote Speech on Global Business trends, please go to minute 24. """ PH will grow like crazy and it is just getting started. """

DMCI also "over"delivers on actual product. http://www.dmcihomes.com/uploads/project/63facility-1461395280.jpg http://www.dmcihomes.net/la-verti-residences.html Again, DMCI's actual project has outdone its render! http://www.skyscrapercity.com/showthread.php?t=1185503&page=54 This is so much better than Eaton, because I read that Eaton significantly underdelivers on its renders. Some individual investors are selling their Flair units on olx.ph for PHP100K+ per square meter, while the acquisition cost was likely around PHP50-55K 4-5 years ago, so a reasonable profit if sold. What I like about Flair (and Sheridan) is its relative proximity to the Boni-MTR-staton and Makati. On a side note, another DMCI development -- VIERA RESIDENCES -- will have a 15 to 19pct price increase on all 2BR units, -- and this is probably because of the VAT coming into play. https://www.facebook.com/vieraresidencesdmcihomes/?fref=ts This is the agent that I follow. He's writing about a 19pct price increase in 2BR units (excluding the luxury end units which already have the VAT factored in), this august 15th. 2016. I find this quite strange. As VIERA is located in the middle of nowhere, -- in a bad neighborhoud probably - Quezon city. In any case, VIERA was the building that has the design that I liked the most, so we will see whether DMCI again will overdeliver this time. The only positive for this one might be the fact that it is not surrounded by major traffic,

Residential Market is Crashing in BGC and Makati Hi Latest report from Colliers is out. Residential rents and colleteral values are dropping in both BGC and Makati, and slightly increasing in Ortigas. I had not expected this. Rents declining yes but colleteral values should hold up. In any case, interest rate on 10year bonds dropped sharply following Duterte's speech so this should mitigate the price declines. BGC has the stock exchange coming and that is where all the wealth is concentrated, and I think it will outperform Makati and Makati will become an Ortigas. http://www.colliers.com/-/media/phil_knowledge_2q2016.pdf