Jump to content

The catalyst - to spur a rush of foreign buyers


Recommended Posts

The catalyst - to spur a rush of foreign buyers

http://www.zerohedge.com/news/2016-08-15/wealth-tax-looms-greeks-forced-declare-all-assets-tax-authority

The Central Bankers Are Preparing A Wealth Tax & Greece Is The Guinea Pig - Episode 1049a

 

Hi All,

Just recently there are new reports about a Wealth tax which is - very likely in my opinion - going to be imposed on the Greek people,

I mean the Greek citizens, and they are the guinea pigs for all the other citizens in the developed world.

This might be the event that will spook the rich and cause a capital exodus out of the developed world, as suddenly the 1pct will realize that even doing nothing will carry a significant risk and for me this is the event that might cause the "real" rally to start.

The fear of loss is a bigger motivator than capital gain and PH real estate will be an excellent hedge against this.

I see the beginnings of an enormous rally in PH real estate.

What other good countries are there outside of W.Europe/USA-Canada/Japan/Australia-NZ? --- all these nations will impose wealth taxes in my opinion. And there are information sharing agreements amongst all OECD member countries so all these countries are high risk now.

That s all for now.

Link to comment
Share on other sites

"This might be the event that will spook the rich and cause a capital exodus out of the developed world, as suddenly the 1pct will realize
that even doing nothing will carry a significant risk and for me this is the event that might cause the "real" rally to start.
The fear of loss is a bigger motivator than capital gain and PH real estate will be an excellent hedge against this."

I agree with some of your thinking, but this is not the only possibility

Another scenario would be a Dash towards Cash.

There's an old saying in times of market crashes: Cash is King.

 

Developing country real estate can be problematic:

+ It is illiquid

+ There's a lack of transparency on transaction prices

+ Taxes can be imposed, and they are hard to avoid.

Link to comment
Share on other sites

(Dan Ortega's posts from the SSC, Economy thread):

1/

Hi E.C.B.
I will assuming you are writing slightly tongue in cheek, given the style of your piece, so I will accept it with some amusement. However, you have not really provided anything new that might show how the Supply gap will be closed.

This part, I must comment on:
"I did not want to "hurt" the numbers guy here. Because let's face it. If my analysis is wrong, I will hurt myself in my pocket, -- and I will only hurt myself in the long run. But if I am proven right, than the numbers guy or the other procastinors here on this board will hurt themselves in their own pocket as they will have to shell out more funds to buy the same amount of unit"

I own more than one property in Makati, so I would be happy to see prices shoot up. But I have stopped buying for the time being because I want to see how the market copes over the next year or so with the challenge of excess Supply. Rents are already falling a little, according to the Colliers report for Q1-2016. And since I already own properties, I want to see what happens to rents and prices over the rest of this year. Since Colliers data only comes out once a quarter, and is delayed by two months, I will also be watching indicators like the share prices of Ayaland and Megaworld. If a drop is coming, we may see it there first.
Here's a summary:

ALI - / Ayalaland -- : Yr-H: $40.80 : 7/21 : $39.90 : Off H: - 2.21%
MEG / Megaworld : Yr-H: $05.15 : 7/21 : $05.08 : Off H: - 1.36%

Conclusion: they are both still hovering near the High of the Year ("Yr-H") - so there is no sign of nervousness yet in the share prices.

I am eager to see any data or evidence that you may have. I find your arguments interesting, but being a "numbers guy" as you have called me, I like to see theories backed up by numbers too. So please share with us, if you come up with any data or hard evidence to back your theories.

 

2/

Originally Posted by Euro_chocozone_buyer viewpost.gif
Question regarding the population growth of manila and the rise of property prices in Asia
Is this a coincidental, causal or accidental indicator? *(POPULATION GROWTH, that is)

Don't forget JOBS !
It is about Population growth and Jobs!
Without a job, Filipinos will live in the provinces, where it is much cheaper.

I invested in Makati's CBD area, because of the large number of high paying jobs there.

One important factor: there are almost No New Offices being added in Makati over the next 2-3 years.
But I am not panicky...

Link to comment
Share on other sites

DESPITE the recent dip in rents and prices (reported recently by Colliers for Q2-2016):

Developers keep pushing up prices on new projects, here's Ayala's latest Premier launch in a super-prime location

"most expensive (condo) to date"

Ayala luxury condo unit sold for P477M (about US $10 million)

Posted on July 27, 2016

A UNIT of Ayala Land, Inc. (ALI) is looking to generate P20.5 billion in sales from its new “ultra-luxury” condominium development located at the site of the old Mandarin Oriental hotel in Makati City.

Ayala Land Premier’s (ALP) Park Central Towers boasts of the most expensive residential condominium units in the country, with prices ranging from P32 million to P477 million for the three-level penthouse.

In a press briefing on Tuesday, ALP Sales Head Mike Z. Jugo said the developer has sold P8.3 billion worth of units at the Park Central Towers at an average price of P300,000 per square meter (sq.m.) making the two-tower condominium its most expensive product to date.

This includes the P477-million Anadem Villa One, which is said to be the highest value primary condo unit sold in the Philippines. At approximately 1,635 sq.m., the three-level penthouse has a limited common area and 281-sq.m. pool deck.

The company has already sold 41%, or 116 units, of the south tower’s 281 private residences to ALI’s loyal clients. The public launch will happen in September.

Park Central Towers will have 57 residences with a private pool and 111 units with double-volume-high ceilings and a private elevator lobby.

Read more:http://www.bworldonline.com/content....477m&id=131020

 

Prices (on unsold units) range from P 2xx - 3xx per sm

hcVDCOn.jpg

Link to comment
Share on other sites

The last line from this new post on PH-DATA thread may support your theory somewhat

On 8/20/2016 at 5:03 PM, DrBubb said:

The Liveability of Manila - stuck at over #100 (rank in the world)

Each of 140 major cities of the world were assessed in 30 separate categories by EIU, a London-based service
Manila came in again at #104 in the 2016 survey

Problems:
+ Poor infrastructure, inadequate healthcare and education systems

Ranked #5 in Southeast Asia, behind Sinagapore, KL, Brunei's capital, and Bangkok
The roads and the infrastructure (including public transport) are a big part of the shortfall

Good points:
+ Restaurants, availability of consumer goods and services

The Survey makers believe the PH govt needs to invest more in the lower rated areas.
Melbourne, Austr. was ranked as the most liveable city, followed by Vienna, Vancouver, and Toronto.

A new trend has been a weakening of global stability scores - ie more terrorist incidents - which have been reported in many countries including: Turkey, Australia, Bangladesh, Pakistan, France, Belgium, and the US.

Link to comment
Share on other sites

Developed country real estate can be even more problematic than developing country real estate

+Illiquid.

Japan's population will drop from 120M to about 60-70M by the end of this century, and that

will likely mean that about 40pct of the sellers of real estate will never find a buyer in the coming

years, and when you really look at the buyer/forced seller ratio, you truly understand the magnitude

of the "illiquidity" which will engulf Japan's real estate markets in the future and most of the developed

markets face the same issues in the coming years.

+Taxes can be imposed.

Sorry but Vancouver is a developed market which just recently imposed a 10-15pct transaction tax,

and if I am not mistaken, the teachers union in Chicago forced a property tax increase on Chicago

residents of about 300pct to 500pct. So please tell me where taxes are rising the fastest???

+Lack of transparency. This is a non issue since real estate in the first place in a "imperfect market"

unlike the stock market where market makers exist -- one of their functions I believe is to

continue to provide liquidity. So we might never know the true price of a real estate transaction

because high taxes encourage black markets. And some sellers are in such a need of money

that they can easily accept an offer which might be 10-20pct below market value.

 

But as an aside, transparancy is not what truly interests you as an investor. At the end of the day

the reason why stocks go up or down is because there are more buy orders than sell orders,

and for real estate it is exactly the same. If more buyers appear than sellers than prices have

a tendency to rise, and if the sellers outnumber the buyers than prices tend to fall. As long

as I can expect more buyers, I can expect prices to rise, -- and there might be a few tough

years in PH -- but I expect the ratio of buyers to always outnumber the ratio of sellers and prices

to move higher. Prices are just a reflection, - a derivative - of the underlying buyers/sellers

ratio, and as long as I understand this ratio, I believe I will do well.

 

Therefore -- even if prices were to fall 10pct over the next 3-4 years -- I might still do well

in the subsequent recovery which will be strong in PH, -- and time will bail me out,

but in Japan TIME will KILL you because the underlying trend - excluding net immigration

which as always is hard to predict - is one of a steadily increasing number of forced sellers

and an ever decreasing number of buyers, putting enormous downward pressure on prices

over there. (until 1948+81, that is when the greatest number of forced sellers will die,

so until 2030 there will be increasing numbers of forced sellers)

 

About 40-50pct of Japanese investors will lose everything in real estate, -- I mean

when you sell your house and nobody wants to buy it -- even at a very low price,

you lose everything and this is coming. It will be a 100pct loss.

Even commodities are less risky as an investment because you will always get

some residual value in my opinion.

Real estate is a high risk investment, -- that is what I have learned.

Link to comment
Share on other sites

+Lack of transparency.  This is a non issue since real estate in the first place in a "imperfect market"
unlike the stock market where market makers exist -- one of their functions I believe is to
continue to provide liquidity. So we might never know the true price of a real estate transaction
because high taxes encourage black markets..

-- unquote ---

Have you ever invested in Hong Kong?

It probably has the most transparent property market in the World.

Check this out - you can get WEEKLY prices for dozens of major Estates;

Centa-City Index : http://www1.centadata.com/cci/cci_e.htm

And these prices are pretty accurate.

Compare that with Manila, where no one really has a clear idea of "last done"

 

This great transparency is one of the reason Banks are comfortable lending in HK, where you might pay

just 2% on your Mortgage Loan, versus the Philippines, where you might pay 5-6%

So I would say: Transparency matters

(in edit):

Here's a thread about changes coming in the PH secondary market:

SECONDARY Property Sales: Great Transformation Coming?

Another related thread:

Manila : Richest City in Asia - Again someday?

Link to comment
Share on other sites

One of the reasons that I got a PRRV visa was because...

I was concerned that if there was a flood of foreigners into PH. the govt ,might make it more difficult and more expensive to get a retirement visa.  And they might also impose higher costs on foreign buyers. This last thing is already happening, since Alveo charges foreigners 15% more on most (all) of its properties - when they are available at all

Link to comment
Share on other sites

Archived

This topic is now archived and is closed to further replies.

×
×
  • Create New...