Makati MEET-UP! Join us for Face-to-face Discussions

[drbubb]

Makati MEET-UP! Join us for Face-to-face Discussions ... MeetUp website

> LINK to Phl. REITs charts & data: pg.3:

There is a popular Meet-up focusing on property investing every two weeks (or so) in Makati.

Join the discussion online (here or through the Meet-up site, or Join us in person.

We usually meet at Seattle's Best Coffee* in Greenbelt #3* mall on Saturday morning      / see new venue*

*( Note: In 2022 location is now most often at Coffee Bean at Greenbelt, from 1030 am.)

But sometimes we meet in other locations, and there are periods when we meet on consecutive Saturdays

 

So Check the Meet-Up site for details of coming events

> Makati Mastermind / MANILA INVESTORS: https://www.meetup.com/Manila-Real-Estate-Investors/

(Note: those who attend may also be invited to join a Viber discussion group - No spammers please !)

===== =====

How to JOIN the Discussion on threads here - It's Free

To join the chats & the community here at Makati Prime, ... and also participate in the various GEI forums

Go Read the instructions in post #2 of the GEI Landing page.

(However to get past security, you will need to be able to answer a question concerning Dr B's favorite animal.

Hint: It is not an animal at all it is THIS GUY, Admiral Byrd, who spells his name with a "Y", and not an "I")

Photo of one of the Meet-up groups,

Manila Real Estate Investors :

Membership to the Makati Prime forums on GEI is free, and once you have joined, you can post on the Forums here.

The Meet-up Groups are also Free to attend. Sometimes there are limits on numbers, so book early.

===

*Starting in 2024, we have moved the Venue to ...

COFFEE PROJECT, on Aguirre St. (Behind AIM, near Greenbelt), from 10:30am 

We meet there almost every Saturday morning

[drbubb]

NOTES - on 4/21/2017 Meeting

========

Topics discussed earlier revolved around 2 major topics, brought to us primarily by conversations by Fe, Will and Vlad.

Topics are: Agro Industrial Developments and Deathcare - Columbarium Investments.

Agro industrial investments:

*interesting opportunities coming from foreign investors. Might not be accessible to all on the demand side, but on the supply side (landholders) could potentially be lucrative.
*full service consulting and financing has been repeatedly done before.
* arrangement rates are good
* if you have land in Luzon, or know someone, then coordination in this could be good

Other trivia:
* Thailand based CP (Charoen pohpkhand something hehehe) is heavily investing in the PHILS. And offers fairer terms compared to SAn Miguel to their contract growers.
* better eat free range chicken if you want a more humane treatment for your food. Some growers are forcefully fattening chicken in ways I would rather not describe here
*Central Luzon opportunities due to agricultural investments may open up and could be a good thing to look into

Deathcare And Columbariums:
Update: HVN / Golden MV Holdings - has been a great investment! One of the best performers

Deathcare as an industry-
*sensitive
*in primary market, predominantly composed of mature sellers/agents, with capacity to be empathic as a key factor
*expanding market in mature economies like US, but growing in the Philippines as well
*supply either accesses the market pre-need, at need, and post-need, with varying prices enjoyed
* euphemism filled(?) - called home to glory = death

Columabariums (and other notes on memorial parks and the like)
*Villar company going IPO in this space ( HVN, Golden MV Holdings )

* In terms of pricing, seems similar to condo market in terms of the developer dictating price increases at pre-selling stage. Increases are at about 30 ++ percent per annum during a certain period, at least until secondary market absorbs majority of sellable inventory
*low cost of entry - with 35k ++ at preselling stage, installment basis
* at secondary market - double or triple, some selling for 100k plus to 150 plus

(final note):

I may have missed a lot of other points. Feel free to contribute here

- I. M.

[MrCashFlow]

Hi to readers of GEI and Makati Prime.

This is Ian, founder of the Manila Real Estate Investor's Meetup. I do hope that readers of this forum will go and join our meetups, happening now almost every Saturday.

Just a heads-up, we're making BIG improvements in the Meetup as more and more people attend it. Everyone who is genuinely interested and committed to real estate investing is welcome to join the group.

I hope to see you there! We have another Meetup tomorrow. I'll post notes again for those who can't attend.

-I.M.

[MrCashFlow]

NOTES on today's meetup:

We had guests from the U.K. who mentioned that they were international financial advisers. We also had a returning guest talk about investments outside the Metro Manila.

1. Unique HK Pension Fund structure will allow you to purchase more real estate (or other assets) plus grant capital protection

• The conversation got technical. But basically, Steve and Neil from U.K. discussed these financial structures that will enable you to purchase more assets and protect them from adverse events. This could be ideal for individuals and corporates with large asset holdings. For those with small ones, collaboration with multiple small investors may allow you to take advantage of unique benefits.
• All I can say further was it was an exciting talk. Manila REI members will hear more about the specifics soon.

2. Locations outside Metro Manila, particularly Central Luzon, offers structured investments that offer superior returns

• Arranged transactions and development projects exist outside the metro, with lower competition. Barriers to entry can be surmounted with proper relationship building and local expertise. Once the foundation is laid, liquidity and returns can be attained easier.
• Partnerships and collaborations are open to selected and vetted Manila REI members

Comments are very welcome, especially for the first item. I'm not familiar with HK jurisdiction so I'm not sure I understood everything they said correctly. I confirmed the gist of it though.

[drbubb]

From the Viber chat:

Filipinos prefer Land..  at EVO City

"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:

Sales Value: P7.48M 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.!)

==

> as recorded on the Data thread: http://www.greenenergyinvestors.com/index.php?showtopic=18811&page=16

(there is also a detailed discussion about prices, indices, and the impact of inflation)

[drbubb]

May 13th Notes / The Meet-up organizer, IM, produced these notes after the Meeting:

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

Manila REI Meetup Updates — Build and Sell; and the importance of Investment Goals in Real Estate Investing

Hi fellow investors!

This week was a pretty exciting and new experience to the group. We tried changing up the format a bit and got some interesting results. You’ll see the changes in the upcoming Meetup schedules, especially of topics and formats.

I’d also like to give a mention on our plans to start a LEARNING SERIES, designed to give members something more structured to learn from and also serve as a launching pad for action and real investments to happen. We will have more concrete announcements before the end of the month so stay tuned

The May 13 Event was attended primarily by newcomers, and everyone had interesting perspectives to bring to the table.

While the topic started on basic financial calculations on real estate, the topics evolved into Build and Sell and Investment Goals.

Let’s explore them a more below.

Build and Sell — Concentrated Profits

An expert in Build and Sell attended the Meetup and shared loads of learnings about his experience and a general idea of how the business is done. He also does mentorship, so maybe you could connect with him in the near future.

In any case, here are some of the points he made about the Build and Sell business, combined with some of my takes on it as well based on what he mentioned.

1. Concentrate on a selected location and know the field

This will you give you the advantage of knowing the right brokers, the right land prices, and the right suppliers for the construction that you’re going to make.

With practice and as you build more in a certain location, you’ll get brand recognition, word of mouth marketing, and economies of scale. You’ll also develop “shortcuts” on whether a particular piece of land is worth building on.

 

2. Build on subdivisions with good supporting infrastructure and amenities

People are not only buying houses, they also buy into the community where that house is. With good infrastructure in place, the overall costs of building a new house in a developed community is usually lower for a build and sell developer than a first time construction.

Moreover, the resulting product will have a good and lasting value in the eyes of potential buyers, lowering the build and sell developers overall risk.

 

3. Construction and marketing sales teams are very important

When you build and sell, it is important that you have the right teams in place. With each project costing many millions of pesos, you can’t afford to increase your risk with subpar construction teams and low performing marketing and sales teams.

There are even certain cases that, due to the brand you have built through the quality construction teams you have, houses can be pre-sold even before construction. This significantly lowers your risk

By doing all of the above plus other principles, the expert has amassed multiple projects in Southern Manila, to tune of more than Php 100 Million in ongoing projects.

It would be worth seeing if this could be replicated in other areas, and whether the Meetup members can work together to make this a viable investment effort.

 

Investment Goals matter first before the investment vehicle

Questions were also raised about Evo City by Ayala.

Evo City is a new and upcoming development of Ayala Land that, in my opinion, seeks to replicate the success of Makati in southern Metro Manila. With the huge interest in the location, it’s initial residential lot inventory reportedly got sold out in 7 hours.

One of the attendees posted a question as to whether investing directly in Ayala properties, or investing in nearby properties make more sense in the long run.

Based on the experiences of the attendees, the following answer emerged: it depends on your investment goal.

1. Investment Goal is Cash Flow = Ayala /Masterplanned Property— it may make more sense to invest inside Ayala properties and buy either a commercial space or a condominium. The characteristics of the property types lends itself to this type of investment.
2. Investment Goals is Speculative Capital Increase = Outside but Near Ayala/Masterplanned Property — investing in nearby properties could take advantage of the development and the price differential between the property inside the masterplanned area and lands outside it.

Of course, there are other considerations. As a general rule though, the above seems to me like a sound filter for decision making.

========

NEXT WEEK

I’ll be out next week, but since some of the more active members are coming back, I’m not cancelling the Meetup. I’ll try to post notes here after they finished and see what I can do for you.

 

About the Author — Ian Mallari is the founder and organizer of Manila Real Estate Investors Meetup. He also works as the Lead Consultant in GYC Consultants Inc., a financial consulting company. He works with medium to large sized corporations on arranging business deals, from project acquisition to project financing.

To know more about him and his projects, see ianmallari.com

[drbubb]

( i was the back-up host)

May 20th Notes ... and produced these notes several days after the Meeting:

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

Over 250 2nd hand properties for sale : https://homes.mitula.ph/homes/condominium-used-makati

Secondary Market - in Makati and Manila - May 20th
================
This was the main subject of our discussion on Sat. May 20th.
We also spoke a bit about financing before moving to other subjects. Since the group became larger as the morning moved on, we wound up splitting into two small groups, and I am only recording the subjects discussed by the larger group..

Two-tier market

Demand remains high on the Luxury end of the Makati property market. Ayala and others have been able to sellout their offerings at higher and higher prices. Recent launches by Alveo of Gentry Residences sold fast at P165k and up, and ALP sold the top end of their latest launch in AyalaTriangle as high as P350K psm - this is equivalent to "Singapore prices" some are saying.

Meantime, there are a near record number of completions expected during 2017 in both Makati (4,700 condo units, +22%) and BGC (8,500 units, +35%). Completions are expected to drop next year, especially in Makati. But the numbers are beyond demand, and so downwards pressure on rents is expected to be felt for the next year or two. Colliers has already reported a 5-10% drop in rents, and many landlords are having trouble finding suitable tenants at the rates they had expected to receive.

Manila Bay (supply up almost +300%), and Century City, were flagged as potential trouble spots. One of the attendees said that he had heard that Century Group had a project called Stratford Tower, where they had stopped construction - and were trying to sell the part-finished property for several billion pesos.

Disappointing rents are causing some owners to put their properties up for sale, and so secondary market prices are also under pressure.

We spoke about the difficulty that some are having in SELLING their properties. One member said he has had two properties on the market for a year. He has been making decent returns by letting them out short term, but he is seeing more competition in that sector too, and he could foresee competition intensifying.

One of the members (from the UK) thought we might see a "crash" with rents and prices falling more than 20%.

While not ruling out this sort of drop, I did point out that a surplus of 4,000 - 5,000 condos in Manlia was capable of being absorbed in Makati, because 2-3 million (or more) people are said to visit Makati everyday. There seems to be an almost infinite demand for property to rent at P10-12,000 per month. And so nearly all places could be rented, if landlords would cut their asking prices enough.

Financing is a key factor in maintaining the two-tier structure of the market, since overseas buyers like OFW have been trained by agents to focus on the size of the monthly installment payment they are making, rather than the prospective yield, or the price per sqm that they are paying.

So potential buyers have said that they are having problems in finding Bargains in the secondary market. The Viber chat might help in this, and also this Makati Prime website. Here are some threads to look at:

+ BARGAINS: Prime Makati locations, Specific Properties

+ TIPS: Choosing a Condo to Rent (or to Buy) in Makati

+ MAKATI Property Listings - For Sale

==

+ OLX was also mentioned as a source for potential bargains to be found:

https://www.olx.ph/real-estate/real-estate-for-sale/apartment-condominium

 

And there will be more threads coming in the future.

[drbubb]

(NOTES from the Meet-Up organizer, Ian M.):

Opportunities Still Abound in Real Estate despite Challenges — May 27, 2017 Manila REI Meetup

REI Meetup Attendees looking on the 3D Map of Metro Manila

This week we had an enlightening session on development in the Metro Manila area. Ayala Premier hosted this week’s meetup, and they were kind enough to show a 3D map of the Manila area. Of course, they highlighted their projects as well. Here’s a picture of the group as we listened in to the presentation

I’d like to share with you some of the learnings we had during the Ayala session:

1. Ayala properties get bought fast by previous investors

Mostly because these previous investors already trust that they would get quality products and perhaps decent or even substantial returns from Ayala project. Certain projects get bought out within the day it is introduced.

2. A shift in monopolizing and master-planning a whole city is underway

We have seen this in Arca South and now Evo City. Ayala claims that this is to ensure that the projects deliver a consistent quality to their customers. As a bonus, this would also make sure that the properties can be sold at prices that Ayala can control across the board.

3. Infrastructure plays an important role on city development

The masterplanned Ayala cities all sit near or at major infrastructure projects. They coordinate the government in this matter and also have their own infrastructure development company. This ensures that their projects would most likely have advantages on accessibility and future developments compared to other developers.

A lot more questions were thrown about other developers and whether it was more advantageous to buy near or at an Ayala property. This was covered in a previous post.

 

LUNCH CONTINUATION

Other members of the meetup continued our chat over lunch. Two interesting notes about it:

1. Unique opportunities in foreclosure investments combined with renovation works still present themselves

There was a story about a self-liquidating asset that was structured in such a way that all floors, even the rooftop, made some money. It was essentially a 30% cash on cash return per year, a truly surprising statistic.

2. Property management is crucial for large scale build and sell businesses

While build and sell could be a very profitable business in real estate, sometimes big developments need a good property manager to be a sellable asset. Big developments are normally income generating assets that can be sold to others. Just look at how SM Investment Corporation bought MyTown, a dormitel chain in the Philippines.

 

CONCLUSION

All the discussions make me optimistic that no matter what’s happening in the market, there are always opportunities available for the serious real estate investor. It just takes some creativity and effort, but if you have that, then real estate might just be the right investment tool for you.

To your success,

Ian Mallari

P.S. Some announcements these coming weeks on a VERY exciting learning opportunity for members and non-members alike, so stay tuned.

> Ian M's Blog :

(you can comment there or here)

[drbubb]

COMMENT on Zipmatch "Data Science" statistics.

=========

> http://www.propertyguru.com.my/property-news/2017/5/152765/investing-in-a-property-in-the-philippines-heres-what-you-need-to-know

That list on Zip of "Hottest Pre-selling Properties" looks a bit odd to me. Is it based on the fastest selling, or the cheapest?
Amaia projects are at #1 and #2, Avida at #18 and #19. #29=Noble Place. #30=The Rise.
I have looked at Noble Pl and the Rise, and my belief is The Rise has sold much better. Not a single Alveo project, which surprises me.
Strange. I wonder how they compile it? (Maybe Alveo does not participate. No SMDC projects either, it seemed.)

There is a separate list of RFO properties, where you can find Jazz at #3, and it shows a Gross Rental yield of 8.8%. Cityland Makati Exec Tower at #42 is the yield champ at 10%. And Trion Towers at #17 has a "low" yield of 6.8%. The Beacon is #34 with a nice 8.5% yield. One Rockwell (#21) seems to have the lowest yield at 6.1%.

Their Conclusion:
"Condominiums in the Philippines, particularly Metro Manila, make excellent investments. This is mainly due to their affordability and high rental yield rates that compete with most areas in Kuala Lumpur. While a condominium located in the CBDs of Makati, Ortigas Center, or Fort Bonifacio makes a good investment." I wonder if the comment would be the same on an After-tax basis, and what impact the current Supply glut will have on actual rentals achieved for those who are buying now, or having new properties turned over.
=== ===

(From the Viber chat)

.

Correction: It is probably based on hits on Ads on their website.

For Hottest Pre-sale & RFO, they say:
"Data from all condo listings received on ZipMatch from Jan'16 to Mar'17."
Their hit data also shows the smaller units have higher rental demand (from search data, I suppose):
"Rental demand for studio-type and one-bedroom units is far larger than two-bedroom units and up. This is especially true for central business districts or areas close to them, such as Ortigas Center (with Greenfield District, Ugong, Hulo, and Maybunga) and the Makati CBD (with Salcedo Village, Legazpi Village, San Antonio Village, and Bel-Air Village)."
Nothing unexpected there.

[drbubb]

NOTES:

Wow. One of the best Meet-Ups yet today.

Thanks to all 10-11-12 who participated. And maybe especially Elmer for his explanations of the BUY-BUILD-SELL model; and Bom for inspiring the "High-Yield-Club" idea,

"High Yield Club"
This idea was coined today at the meet-up. It really came in response to a goal of Bom's.
he said that he was seeking a project that would yield 15% (and where he might finance at least 70% at 5-7% interest.)

+ My first reaction was: this is almost impossible, and so "good luck, Bom" But they we realized that other investors, like W., were getting 10-12% returns, and maybe higher by focusing on cheap properties where there was strong rental demand -like those built by Cityland. Two other group members had bought Cityland properties and enjoyed good returns. So we talked about the idea of bringing in people, such as Cityland agents to talk to us about potential high yield situations. We could have a high-yield focused meeting every month or so. And seek to invite relevant spekers.

+ Another complimentary idea might be to seek cheap sources of finance for secondhand properties. We could invite in banks, and maybe especially foreign banks seeking to enter the market, who might talk to us about the programs and terms they have for financing second hand properties

========

BUY / BUILD / SELL

R.K.

Ahhh wouldve loved to here more about the buy build and sell, will there be notes on ur website on this??

From memory:
+ the demand for homes from Pinoy buyers in Metro Manila is very strong.
+ It used to be that people who worked in the Makati CBD thought Las Pinas was "far away", but they woud buy there, becaue it was what they coul affors
+ Improvements in transport (SLEX) and new CBD's has meant people will travel longer distances, and can still be within 60 to 90 minutes drive of their place of work
+ Thus, the range of home construction has reached down to Laguna and even Cavite
+ Demand is strong, up to P 10 million cost, since "every Filipino wants to own his own home, and many can now afford up to that price
+ The land cost might be P1.5 million on such property, and the build cost can be kept down to P5-6 million provided and experience developer can develop (at least) three adjacent lots at once
Elmer used to to do this sort of home building general contracting himself, but now he prefers to mentor others, and assist in the marketing and arranging finance for the buyers

One of our member (M) has been thinking about a townhouse project on a large piece of land owned by his family, and there would be room for more than three townhouses on such land.
The problem is: the driving time and distance (ie more than 2-3 hours, and still beyond Clark Airport by maybe one hour.)

Elmer thought such a location might be better for a "retirement village". M has a report coming about best possible use

[drbubb]

MAKATI FAULT - biggest risk is in BGC

We as spoke briefly about earthquakes and a possible fault in Makati

Architects give only a 15 years guarantee on their buildings and some structural damage can be done by an earthqualke, especially in areas where there are faults

I found a map showng the fault zome across greater Manila

/ 1 /

WEST VALLEY FAULT SYSTEM. The Philippine Institute Volcanology and Seismology (PHILVOLCS) came up with this map last 2015, detailing which places in Luzon are right on top of the West Valley Fault System.

/ 2 /

A CLOSER LOOK. McKinley Parkway, one of the places seen as a platform for the Mega Manila Subway, is dangerously close to a part of the West Valley Fault System.

Netizens have chimed in via the post on Skyscrapercity.com Philippines, with most saying it’s a step in the right direction. Some netizens were concerned about flooding and the prospect of the subway system being hit by a massive earthquake, as one of the stations falls close to the West Valley Fault system.

==

> http://primer.com.ph/blog/2017/04/05/jica-releases-plans-for-mega-manila-subway/

[drbubb]

WE'RE BACK!  (from a short pause)

Meeting again

[drbubb]

( We are BACK - & MEETING again after Covid ! )

Meetings are happening on SAT MORNINGS, usually at Greenbelt in Makati

Coffee bean, inside the mall has been our most popular venue.

More recently, we have sometimes moved to Wild Flour across the internal garden - But that was only for one week

## FLASH UPDATE ##

IAN's MEETUP Page is BACK! 

Saturday, July 23, 2022 at 10:00 AM to Saturday, July 23, 2022 at 12:00 PM PHT
The Coffee Bean & Tea Leaf - Greenbelt 5
Ground Floor, Greenbelt 5, Ayala   

> https://www.meetup.com/manila-investors/events/287301104/

[drbubb]

We had over 15 people join us this weekend!

But NOT ALL were there at the same time

Some "Veteran members" In our BREAKOUT SESSION- with a Property Developer...

We saw some interesting Promos where dozens of units were being offered a deep discounts

- like P145k-150K per sq m.  And the buyers could finance their 15% downpayments over multiple months.

LATER on Sunday:  I read some reports about CANCELLATION RATES, and wrote this...

CANCELLATIONS are Huge:

(I think Chinese buyers may have dropped a huge # of units, and that may be why Robinsons is running promos now): 

"Metro Manila residential: increasing inventory, elevated vacancies
As of Q122, property consultant Colliers has recorded Metro Manila residential vacancies declining to 17.8%, the first time since 2019. This is however still way above the 10% recorded then, as overall take-up and slower launches did little to improve inventory levels. Although sequentially improving, sales velocity in Q122 looks tentative, and we believe near-term demand for residential property may continue to be weak due to macro/inflationary concerns. We reiterate our preference for retail malls for exposure within the sector, with mall landlords, SM Prime and Robinsons Land, as our top picks although we can probably see support for ALI share price at these levels."

"Developers reporting cancellations, write-offs in bookings
In the past six months, developers have reported meaningful cancellations/back-out rates in projects that resulted in write-offs: most recently seen in Q122 results of Ayala Land and Robinsons Land. Property consultant Jones Lang Lasalle (JLL) also noted several units being returned to the market, more so than before....  

We estimate cancellation rates may hover above 5% of unbooked revenues (vs below 5% normally), while gross presales should continue to record 15-20% back-out rates (around historical average). Meanwhile, we estimate Q122 presales are down 3% YoY among our coverage."

> [ PH_PropertyReport_

[drbubb]

ROBINSONS LAND / RL, Sat. 7/23:  had a breakout session with Agents

SYNC in Pasig, near C5 : on their website, the List Price was P 4.77 Million / 22 = P 217k psm

  Two sales agents presented some opportunities with RL: A low-payment installment purchase at  SYNCH? In Pasig - where the cheapest unit was a 22 sq meter Studio priced at P 4.15M all in, with the 15% downpayment (paid in about 5 years!) and an 85% balloon at turnover in 2026-27.  The monthly payment is just P9,300 during the construction period.  The price was not cheap at near 200k Psm, but they showed us some plausible calculations that if rents go up to 20,000 a month, that is maybe pre-Covid levels, a Gross Yield over 6% would be possible.   Towards the end of the session, they mentioned an even cheaper deal,  But you have to participate n a lottery to get a shot at it - 30 units remain, and >250 people are in the lottery already.  Units are priced at just P145K psm, with monthly payments of just P6,000 Monthly.  Far below current Developer prices.

AXIS, The lottery property is behind Robinsons Forum in Mandalyulong and is now listed at over P250K psm.  In fact they have already sold 150 units there. (I suspect that RL had a big cancellation, and is trying to offload the units quickly, so they do not have to keep them in inventory for more than a few days.  I agreed to submit details so I could participate.  Who knows, I might even take a punt on it.)

COMMEMT

Seems like "buying" a new property now, has turned into something like buying CALL OPTIONS. 

People pay a small amount each month, and hope that prices will rise enough to:  either allow them to flip at a profit, or RENTS will be high enough to  justify making the final balloon payment, taking possession of the NEW property and renting it out.   When I bought two new Condos at market prices 6 years ago, I saw it as an investment where the YIELD at current rents would provide a decent return.      The prices I paid for NEW Condos in Makati then were: P126k psm and 96K psm.  And these prices were not far above the secondary market.  With the huge rise in New Condo prices, and little improvement in Rents,  the buying game has morphed into a high-leverage gamble.  If secondary prices and rents don't rise back to pre-Covid levels, then I reckon many buyers will chose to cancel.  In fact, recent news reports are talking about Record cancellations by some buyers.  ( In fact, that may create an occasional buying opportunity, if developers offload excess inventory from Cancelled sales at historical prices, below current levels.)

No wonder so many of the Property Developer share prices are now under pressure and near their LOWS of the last several years.  Here are the there property developers with the highest Yields, at or near 5%.  Other developers have already cut their dividends.  But many of the shares now trade at low levels, suggesting an opportunity if earnings can be maintained somehow.

FLI/ Filinvest Land, LAND/ City&Land, SHNG/ Shang ...

All: 5yr: 10d/ FLI-0.93/ SHNG-2.58 = r-36.0% , LAND-0.71.. w/ALI /          ... as Updated to Jan.2023

Stock/  Company : Price: BkVal.: P/BV:  PER :  Div.  : Yield :
FLI.   / Filinvest Ld: 0.930: 3.62 : 25.7%:  7.64 : 0.047: 5.00%
LAND/ City&Land : 0.710:  1.67 : 42.5%:  4.36 : 0.032: 4.46%
SHNG/ ShangPrp.: 2.580:  7.83 : 33.0%: 5.55 : 0.114 : 4.42%
CDC / Cityland Dv : 0.690: 1.75 : 39.4%: 5.27 : 0.022: 3.22%
RLC  / Robinson.Ld: 16.70: 24.3: 68.7%: 13.17 : 0.500: 2.99%
FDC  / Filinvest Dv: 6.870: 14.3 : 48.0%: 12.23: 0.070: 1.02%
===   (No dividends):
MEG  / Megaworld: 2.230: 6.24 : 35.7%: 4.98 : 0.000: 0.00% > now pays div
VLL.  / Vista Land : 1.960:  8.61 : 22.8%: 3.52 : 0.000: 0.00%
ROCK/ Rockwell.  : 1.300 : 3.81 : 0.00%: 4.84 : 0.000: 0.00%
=====

> see STOCK chat (scroll down): 

 

[drbubb]

WHAT DOES 'CHEAP' MEAN?  / Replica CHAT - based on a Real One

REPLICA CHAT with Agent A.
AGENT A contacted me back in the spring, wanting to help me rent my unit, I told him that I would consider but I had a target “net to me of 20,000 a month.”  If he had a client, his commission would have to come out of charging higher than that.  He was quiet since then.  Last night he contacted me again.
A :  Is your unit still available?
Me:  Taken.  We have a tenant now.
A : I have a tenant, who can pay 18,000,  And more if the decoration is nice.
Me: Actually, we got 19,500 with no agent.  (I didn’t tell him, but this was equivalent to 20k, because the tenant said he could do without the washing machine, we were willing to provide.)
Me: I should have another similar size unit soon in a better location.  What is your tenant looking for?
A : Are you buying units now?
Me:  Only bargains.  The price needs to be a discount to ZONAL, and at 7% or better yield
A : How about Condo XXX?  My client has a unit for sale.  28 sq 1BR at P 3.5M.  It is worth over 5M
Me: What is the rent there: 18,000 a month?  Or maybe 20K, if very nice decoration
A : You can get 20,000
Me: At 20K = 240k per annum / 3,500k = 6.86%.  Not so keen on that Condo.  The building is tired.  Would probably need 8% there.  And I am not sure that 20K can be achieved.
( At this point, a smart agent would have shown some photos.  But NO! …)
A : The normal rent is 30K. But because of the Pandemic: 18k to 21K, depending on decoration.
Me:  I really don’t care what the units were before.  One of my units, I had to cut the rent by 27pct to find a tenant.  I use today’s rents in my calculations.
A : 3.5M all is very cheap, sir.  After a year if you want to sell it, you can sell it at a higher price.
( Haha.  Right. And if I am lucky I will cover the transactions costs. I did not send that comment. haha)
Me: Well maybe you should buy it then.  I really must take a DISCIPLINED approach. Please Read Colliers latest. Out today. Low Rents and high vacancies persist.  Only true BARGAINS in building where we want to own makes sense.

[drbubb]

MAKATI has massive ASSESSED WEALTH

Makati is once again hailed the richest city in the Philippines. The Commission on Audit (COA) assessed Makati’s wealth to be worth a whopping P233.4 billion, leaving Quezon City far behind in second place with P96.4 billion. 

Makati’s history of wealth and prosperity goes all the way back to the 1800s when the Roxas-Zobel-Ayala clan purchased 1,000 hectares of farmland in the Hacienda San Pedro de Macati, which would become a third of present-day Makati City. After World War II, the Ayala family developed this estate, envisioning it to become what is today, the most successful business district in the country. 

Much of Makati’s wealth today comes from taxes collected from its business district, home to many of the country’s top 100 corporations...

> https://www.esquiremag.ph/long-reads/features/makati-richest-city-a00293-20210114

[drbubb]

METRO MANILA, Average Condo Prices

Metro Manila is ₱ 190,341 per sqm :

HIGH: 199,734 psm Sales Price in Sep.2021
LOW:    80,564 psm Sales Price in Aug.2016

The median list price for condos in Metro Manila is ₱ 8,548,396. The median list price has gone up by 14.6% over the last year. The median list price per square meter for condos in Metro Manila is ₱ 190,341 per sqm.
The median rent price for condos in Metro Manila is ₱ 44,963 (ASK) / 44.9 sqm = 100.1 psm.  The gross rental yield on condos in Metro Manila is 6.3%.

Per DotProperty, Aver listing Price per sq for MANILA CONDOS

- has moved mostly SIDEWAYS, with a slight dip, over the last 12 months or so.  And having backed off Resistance at P200k psm it may be on or near support at..." The median list price per square meter for condos in Metro Manila is ₱ 190,341 per sqm."
Those who maintain that "Manila Property Prices Never FALL," may have some mild explaining to do. haha.  Actually, I have seen several bargains for CASH buyers.

> https://www.dotproperty.com.ph/properties-for-sale

[drbubb]

OPEN HOUSE this Sat. at 1pm, to view a Bargain priced property (about 2.5Million.)

It is about 15 minutes walk from Greenbelt, and People who want to join in, should arrive at the Meetup venue by Noon.  Meetup will start at 1030am

[drbubb]

( For DISCUSSION):

ALI-CHI Cycle... LT update : ALI last:  Php 28.65, YrL: 22.35, mid-July'22

( I like this chart because it helps to Highlight the long term E-Wave position - expected Low is Dec.2024, +/- 1 year, so 2023-2025.)

ALI-CHI Long term cycle may have bottomed.  And if it has, Cyclical Low in Physical market is typically within 6-12 months after that.  But even if that has happened, the market may need more time: months or years, to put in a "proper" more saucer-like bottom. (the recent low in 2022, may turn out to be like the V-bottom of late 1998.)

Update#2:

[drbubb]

MARKETS LOOKING BAD - With US L.T. Bond yields near 4.5%

2022:  Some comments from the US Markets Viber Chat on 2022 US Wealth destruction

+ The odds for a 100 basis point rate hike jumped more than 20% after the consumer price index showed an increase from July. With hopes of a “Fed pivot” firmly dashed, the S&P 500 Index tumbled as much as 3.2%.
... on Tuesday, Nomura economists changed their forecast for the Fed’s September meeting from a 75 to 100 basis points, writing that “a more aggressive path of interest rate hikes will be needed to combat increasingly entrenched inflation.” (News Excerpt)

+ it looks the only way to combat inflation is to crash the economy. (SM)

+ I think US Wealth is crashing already!  But the Biden regime's (extensive) use of borrowed printed money has meant that DEMAND DESTRUCTION may be the only way left to fight inflation.  I believe that we have already seen the biggest DROP in personal wealth (in terms of Trillions lost) for Americans.  2022 has brought the biggest loss in US History: Both Bond and Stock markets have destroyed wealth this year.  Property wealth is also sliding now.. (DB)

+ yes and next is Europe ,where things are even worse ,although they don t admit it yet  (SM)

+ One wonders of Elite groups with political influence are Pushing the Fed TOO FAR, so they can create asset markets with Massive discounts, so they can redeploy their own wealth from Cash to Stocks and Property when prices are even cheaper

=== LONG CYCLE UPDATE, beginning of 2023 ===

LONG CYCLE in a Chart: Norm is 18 years: 14 years UP, and 3-5 years Down

Is the Correction over yet?  Rents may have bottom. But secondhand prices may not have bottomed yet - especially: Values of New properties at the time of turnover.

Long Cycle Update: there are Clues in Property stock charts...

FLI/ Filinvest Land, LAND/ City&Land, SHNG/ Shang ...

All: 5yr/ FLI-0.88/ SHNG-2.58, LAND-0.84. w/ALI -30.00. Updated to Jan.2023

I think the next major LOW may be due at end 2024, +/- one year.

I have stuck with that Timing since mid-2019, before the Peak. I Saw it coming.

[drbubb]

QUEZON CITY EVENT Coming Up...

this may be in addition to our Makati MeetUp...

Hosted By Ian M.
Real estate brokers and landowners invited!
Sat, Jan 21 · 10:00 AM
QC Real Estate Meetup - Let's Discuss Properties!
Share and discuss your real estate business opportunities (for build and sell, rental properties, hotels and townhouse ideas) for 2023!
Dominus Consulting OPC is looking for potential partners and investments in these areas and might just be able to help you out.
Attendees (7). > https://www.meetup.com/manila-investors/events/290255017/

[drbubb]

( Guess who took the photo. )

Decent Turn-out, but we held up the Intros because we were waiting for people who RSVP-ed and did not turn-up

( Too many are RSVP-ing on the Meet-Up website, and then not turning up.  Free-stuff is not Valued, I suppose.

So I posted the following NOTICE . )

PLEASE BE CONSIDERATE!  do not RSVP, if you have no intention in coming. 

Or if you cannot at last minute, let us know.  We are trying to maintain a helpful, positive and cooperative attitude in the Group, and basic politeness is helpful.  Don't forget to Read the Notices carefully to see WHERE and WHEN we are meeting.

 

[drbubb]

We are changing the NAME of the Meet-Up chat on Viber...

To > Sat Meetup, FI+RE focus

Why? FI means: Financial Independence, RE is for Real Estate

Thanks to Will for the idea from his trip to Osaka...
Attended a Meetup there:  "What we're about
FIRE FOCUS
"This group is focused on teaching and learning about knowledge and strategies to attain financial freedom, and, to create a network of persons with similar interests for support and camaraderie. Topics of discussion are not set, but would be topics such as the stock market, real estate, cryptocurrency and blockchain, creating and managing businesses, and many other topics. The group is casual "

I like it!  In fact, I intend to SET THE MEET-UP chat ON FIRE.  We can make FIRE / Financial Independence strategies a co-equal focus of the Saturday meet-up Group.  And still include:  RE / Real Estate discussions.   Comments welcome!

[drbubb]

Wanna be in the Top 1%?
(From a discussion on FIRE chat.)

Wow,  US$5.1M gets you into the Top 1% of wealth in the USA.  And it takes just $57,000 in PHL x P55= P3.14M

A: 57k makes it a lot easier to be big fish in tiny pond
B: I think this just says a lot about wealth inequality in the Phils if true. 57k doesn’t even buy you a studio in the metro ..

It does (buy a studio) but probably not a NEW one.  

B: Yea buys you a Cityland studio. Point being … being top 1% does not make you truly wealthy (in the Philippines)

We had a good chat at the meet up yesterday about how to start out in. wealth.  And no one was suggesting a new FIRE seeker should buy new.  Something older, maybe not in the best neighborhood.  But something that allows one to save on rent, and start paying down debt instead

 CONTINUES… )

B:  No only that - real estate is usually being 5:1 levered long asset growth… over time whether because it’s economic growth or currency debasement, you will be making money. Hardly anyone takes levered bets outside of real estate. Hence, if things play out well. This is wealth growth on steroids.

Put down 200k, buy 1m property . Over 10yr things double.. your equity is then 1.2m .. up 500% (if I just ignore the repayment for a second)

Yup.  My goal for many Decades has been:  to have Zero or negative Housing cost,  That is not as difficult as it sounds if you have capital or access to cheap Debt.   Then, your housing cost is INTEREST  paid (or interest on capital foregone), plus association fees, plus Real Estate tax... MINUS: appreciation in the value of the property.   Because I am good at buying cheap, I have achieved this continuously for Decades.   This way, the 1/3 of income which normally goes into housing cost (RENT) has instead gone into Wealth-building. 

THIS is an easy secret of FIRE.