drbubb Posted July 13, 2017 Report Share Posted July 13, 2017 Bargains#2: PHP 4 million & Up: Makati & BGC, Our Focus includes secondhand Find and Discuss property bargains, and the secondhand market here. I must be frustrating to deal with (for some property agents eager to sell expensive new properties.) I have real problems accepting the (high) prices that I am seeing on new projects being offered nowadays - like P170k to 200k per sqm, and higher - mainly because Rents are not rising, and so Yields are falling But I have my reasons, and I think that they are sound and logical Here's why I am resisting high prices: ========= 1. Prices of new projects have moved up too fast imho, especially when you consider the current oversupply (with vacancies estimated to be 16%!! by Colliers by the end of 2017. And the data shows that Rents have stopped rising and are now falling at maybe 5-10% a year. (And the PHP has been weak too - down 7% during Du30's first year in office.) . 2. According to Colliers, Average Rents (for 3 BR flats) are now down to P830 psm. Last time we saw that, mean capital values were P 100k psm. AND Colliers expect average rents to fall further to P800 psm in one year. When we last saw that in Qx-2000 capital values were just P100psm. So I find it impossible, to ignore this reality, and pay up. Colliers reports capital values at XX as of Q4-2016, or a mean of P1XX psm. Even if you knock out some of the super luxury prices (as I do in my own statistics), you still get a mean of just over P150k. I don't want to pay even that much... when prospective rents are drifting lower. . 3. I bought my own properties on 2014 and 2015, and on three properties, I paid an average of P109k psm (126k, 105k and 96k). They are not all in the most prime locations -though two are, but they are all three from good developers, and I expect to make a decent yield of perhaps 7-8% or more when I rent them out. Why should I accept a lower return on new purchases. and dilute my overall returns? . 4. Agents are telling me that there are many properties for sale in the secondary market. And they say that good properties in good locations can now be had for P120-125k psm, and even less if there are distressed sellers, or sellers in a hurry. I am not seeing a lot of detail of what's on offer, but this is what I have heard . 5. Two friends of mine bought resales in 2016, at about 115k psm (in One Central, and subtracting out the value of a parking space, perhaps 100k psm), and about 110k psm (in The Rise, taking over a sellers payment schedule.) Both sales were from "motivated sellers". and I think they were sourced through OLX. So it CAN be done, and in theory, the bargains should get even better in 2017 and 2018, given rising vacancies and softer rents. Having said this, the market is opaque, and it is not easy for a non-agent to see what is on offer. I have started this thread, to capture information on apparent bargains, as I see them. Some of the properties that I mention may be more than 3-5 years old. I think the older properties, even beyond 10 years should be suitable for investing, so long as they are in prime locations, and the buildings are well-maintained. If these properties are beyond your price range, I have another thread for properties prices at P 4 million and below: > http://www.greenenergyinvestors.com/index.php?showtopic=21400Readers here are encouraged to add to the discussion, and post any sales opportunties they think may fit the "prime location, bargain price" criteria ======= I would consider buying more property, but only if I am fairly certain that I can rent it out easily, and obtain a decent yield. and also that I will not be facing a large and near-certain loss, if I decide to sell in the next 3-5 years. My want of finding something suitable is to bargain-hunt in the secondary market. But are there really bargains to be had? Let us see what we can develop here... Link to comment Share on other sites More sharing options...
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