Late last year, I was quoted as saying “substantial market reform would be needed to sustain the real estate boom. Though the market is positive, there are warning signs…” These warning signs include imminent oversupply, the appreciation of the peso against the dollar and slow growth (even fall) in property lending despite the “real estate boom.”
22 Dec, 2007 2008 PROPERTY FORECAST: ‘Positive growth from OFWs, but be wary’ (Inquirer.net)
http://showbizandstyle.inquirer.net/lifestyle/lifestyle/view_article.php?article_id=108291
The positive outlook on the housing market is shared with this article.
23 Dec, 2007 Will 2007 real estate boom go on in 2008? (Manila Times)
http://www.manilatimes.net/national/2007/dec/23/yehey/top_stories/20071223top4.html
In April this year, we wrote that Asia’s housing market will likely slowdown due to the rapid increase in oil and rice prices. The Philippines is particularly vulnerable because of the warning signs I have already mentioned.
21 April, 2008 Slowdown looms for Philippines’ housing market (Business World/ GMA News)
http://www.gmanews.tv/story/90554/Slowdown-looms-for-Philippines-housing-market
When property developers announced that they were hiking their prices by 5% to 20%, I was asked again on whether the market can accommodate the increase. In the article I said “The real estate market typically goes through a cycle of rising and falling prices, it seems that we are now near the end of the house price boom.”
26 June, 2008 End to local housing boom in sight (Business World)
http://www.bworldonline.com/BW062608/content.php?id=101&src=2
full article available here http://philrealtyinfonews.blogspot.com/2008/06/end-of-local-housing-price-boom-in.html
15 July, 2008 Should one buy property now to beat price increases (Inquirer.net)
http://globalnation.inquirer.net/propertyfocus/propertyfocus/view/20080715-148542/Should-one-buy-property-now-to-beat-price-increases
Of course, real estate developers and agents disagree with my prognosis. Several articles say that the real estate market is actually doing fine. One statement even boasts that the Philippines is the hottest real estate market in the region. However, people should be able to differentiate a press release from news.
Press releases typically do not cite facts and figures. They are full of colorful and glossy statements of what may happen that will lead you to either buy the property they are selling or invest your money in their company.
Where is the housing market heading? Let me give you a run through of news from January to August.
15 Jan 2008 Property demand seen close to peak of cycle: Analysts say boom may last for 2-3 years (Inquirer.net)
http://business.inquirer.net/money/breakingnews/view_article.php?article_id=112371
25 Feb, 2008 Fil-Estate offer fails to draw enough interest (Inquirer.net)
http://business.inquirer.net/money/topstories/view/20080225-121167/Fil-Estate-offer-fails-to-draw-enough-interest
26 March, 2008 Metro Pacific ended losing streak in '07 (Inquirer.net)
http://business.inquirer.net/money/topstories/view_article.php?article_id=126420
04 April, 2008 RP Property firms look closer to home for sales (Inquirer.net)
http://blogs.inquirer.net/househunter/2008/04/14/rp-property-firms-look-closer-to-home-for-sales/
20 June, 2008 Construction cost up 20%; property firms hurting (Inquirer.net)
http://business.inquirer.net/money/breakingnews/view/20080620-143724/Construction-cost-up-20-property-firms-hurting
(note: if property developers raised their selling prices by less than 20%, it means they are absorbing some of the costs, this leads to lower revenues and profits)
22 July 2008 BPO space, condo glut seen (Manila Times)
http://www.manilatimes.net/national/2008/july/22/yehey/business/20080722bus1.html
(note: excellent article based on the latest Colliers Market Report)
03 July, 2008 Property stocks tumble on expected interest rate hikes (Inquirer.net)
http://business.inquirer.net/money/breakingnews/view/20080703-146196/Property-stocks-tumble-on-expected-interest-rate-hikes
04 July, 2008 Philippine properties ‘hottest’ in Southeast Asia (Inquirer.net)
http://showbizandstyle.inquirer.net/lifestyle/lifestyle/view/20080704-146540/Philippine-properties-hottest-in-Southeast-Asia
16 July, 2008 When flat is top (Opinion) (Manila Times)
http://www.manilatimes.net/national/2008/july/16/yehey/opinion/20080716opi6.html
(note: a reaction to the news above)
29 July, 2008 Eton projects in full blast despite tough conditions (Manila Standard Today)
http://www.manilastandardtoday.com/?page=business3_july29_2008
03 August, 2008 DMCI Homes sees 11% growth in sales (Inquirer.net)
http://business.inquirer.net/money/breakingnews/view/20080803-152431/DMCI-Homes-sees-11-growth-in-sales
(note: if they raised their selling prices by 12% but sales/ revenues rose by 11%, it means they actually lost money. When adjusted for inflation, their sales actually fell. )
04 Aug, 2008 Prices of construction materials expected to rise (Philippine Star/ ABS-CBN News)
http://www.abs-cbnnews.com/storypage.aspx?StoryId=127197
08 Aug, 2008 Fil-Estate widens losses on bigger expenses (GMA News)
http://www.gmanews.tv/story/112338/Fil-Estate-widens-losses-on-bigger-expenses
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