Philippine Real Estate - Day 205 of Pandemic

 
Robert G. Sarmiento Properties
Professional Affiliation :
Philippine Association of Real Estate Boards
Member, City of Taguig Real Estate Board 2016 - 2019
Real Estate Broker’s Association of the Philippines 2000 - 2015
President, San Juan 2008, 2009
Philippine Association of Real Estate Boards
San Juan Mandaluyong Chapter 1998, 1999
PRC # 6569
PRC Lecturer’s License # 0294
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Day 205, 74 days till Christmas 2020 :

Here’s more actual scenarios on Real Estate Brokers activities and my thoughts on them :

There’s demand for unique commercial spaces for new players wanting to get in Makati CBDs.  The businesses are in food take out or deliveries, information technology, health related and e-commerce  ; pre-covid, there were hardly any vacant spaces for ground floor units at Makati CBD, we’ve seen more units vacated due to business closures or pre-termination of leases.  There is opportunity to get ground floor units within the Makati CBD which was almost impossible before.

Residential units for studios and 1br units are being vacated and pre terminated due to the diminished needs :

• work from home

• less or no traffic to deal with

• loss of jobs

• return to country of origin especially the pogo market in Makati. 

Residential condominium lease rates are now correcting and there are those upgrading to bigger and better unit taking advantage of low demand.  Those that were displaced due to the POGO rates now have the opportunity to get new leases at reduced rates. 

Brokers that specialize on residential and office leasing are so preoccupied with pre-termination of leases and collection concerns. 

What's happening is Buyers are expecting for a number of DISTRESSED Sellers due to pandemic. However, Distressed sellers aren’t as many yet as most expect. The Sellers who are still liquid would rather wait for the right price though they may adjust a little but not as drastic as Buyers thought to be.

There is a big difference between a MOTIVATED Seller from a DISTRESSED Seller which ironically Buyers labels the same.

We are more focused on “End Users” rather “Investors” who are hoping not just hoping for a Fire Sale but unrealistically 2010 to 2015 prices.

This PANDEMIC really gave a "Buying Sentiment" to a lot of Buyers / Investors as this crisis is a once in a lifetime event.

Property owners at prime residential properties in posh villages are still holding their prices but we know some of them are on “Denial Mode” and will eventually lower their price assuming their businesses get affected specially if the vaccine for Covid 19 takes longer to be approved thus further affecting businesses.  There have been a few good deals at about 15% to 20% discount from pre-covid price. My take is if prices do correct, it wouldn’t be what most Buyers hope for, however, you’ll never know.

I noticed that there are less leveraged Individuals compared to the Asian Financial Crisis, thus less distressed sales. for now.  From a developers point of view, it would be best to recompute payment scheme for their buyers rather than ending up with defaults.  What's worrisome for those who bought condominium units are the "lumpsum" payments which are now due as units are for turnover.  This is where opportunities lie for those wanting to take advantage of other's misfortunes.  

We expect the correction and market values in certain areas to hit within the next 6 months but the worse may still come in 1 – 2 years.  However, there are already rare property deals worth biting into, since Investors remain prudent on their buying, there will be always be missed opportunities.  I’ve seen so many of this Individuals who totally miss out on the boat and end up buying their 2nd or 3rd option.  

As some say, it’s very difficult to predict what the future holds but what I know is that the basic fundamentals of the Philippine Economy are sound and good. Our Bankers are conservative and considered one of the best in the world.

There are some outrageous prices being offered for sale by Sellers and also Buyers offering to buy, how we ride this is just part of what we do.  As always, our main objective is to mediate the best deal for both Seller and Buyer, providing the benefit of what the sale / lease of property would bring to parties concerned. 

( some insights taken from Ms. Mylene Ngo )

Visit www.robertgsarmiento.com for blogs, news, case studies and property listings which you may find informative.
 
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Thank you.
 
robert
Robert G. Sarmiento Properties
Professional Affiliation :
Philippine Association of Real Estate Boards
Member, City of Taguig Real Estate Board 2016 - 2019
Real Estate Broker’s Association of the Philippines 2000 - 2015
President, San Juan 2008, 2009
Philippine Association of Real Estate Boards
San Juan Mandaluyong Chapter 1998, 1999
PRC # 6569
PRC Lecturer’s License # 0294
 
 
 

 

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