Is the Property Bubble bursting?
Reading the said article makes me realize that the same
thing can happen in Cebu in the near future. A lot of developers here are
starting to build pricey condos with agents marketing these properties for its
rental income. I even had a friend contact me in Facebook telling me that she
would like to buy a condo and have it rented.
Well, rent is hard to project. Law of supply and demand will
definitely dictate how much you can charge. With so many condos being
“pre-sold” now in Cebu, the supply side of rentals will not be scarce in the
near future. I expect the market
to turn in favor of the buyers in a few months time. If you are buying a condo,
wait it out a bit and for sure, the developers will start offering discounts
(don’t expect a 40% cutback like what CJ Corona had though), perks (trip to
somewhere or a free stay at a nice resort), and other freebies (TV, gas ranges,
other appliance). Once the nicest units are taken, the developers will be
hard-pressed to push the less attractive units.
Do not buy though if your main consideration is rental
income. In Cebu, there are still so many alternatives for a 15,000 a month, 26
sqm. condo unit. At that price,
you can still find a decent-sized 3-bedroom apartment in a good place in Metro
Cebu. With over a thousand condo
units set to be delivered in the next couple of years, you can expect a lot of
competition. For people who are really bent on buying a condo soon, here are
some things to consider:
1.
Location – This is usually the main
consideration when buying any property and the developers know this as well. A
development at a prime location could be priced at over 100k per square meter.
It is ironic to know that Cebu condos could be more expensive than Metro Manila
condos. A buyer should weigh if the unit is worth the price he/she is paying
for. You also have to consider, your lifestyle in choosing a location. Is it
near work, school, business, church, or a transportation terminal? Unlike in
Manila where people waste a big chunk of time commuting or driving to work, I
can still see people who work in Mandaue, while living as far as Talisay, commuting
without any complaints. There is a
premium in location but is 50% justifiable? You be the judge.
2.
Developer – With tens of condo projects in the
pipeline in Cebu, it is a big possibility some developers will not be able to
reach their desired sales targets.
Some might not push through with their developments. Does your
condominium developer have the track record or financial backing to undertake
big projects? Buying during pre-selling periods will definitely involve some
risks. Dreams and ideas are sold by the millions everyday and some might not
become a reality.
3.
Price scheme and other fees – Because of intense
competition, developers now are very creative when it comes to buying schemes.
No downpayment, no interest, big discounts, Reserve now and pay later. There are so many seemingly attractive
schemes to make you forget the big amount you are actually paying for your studio
or 1-bedroom unit. In the end, you are going to pay it all. You may only be
paying 8k a month now, but you will soon be loaning almost 2 million in 3
years. A lot of people buy property because they can afford the down payment,
not realizing that they might not be able to afford the 80% bank loan or
balloon payment. Many agents and brokers do not take much time fully explaining
this aspect. There are also other fees that may be collected apart from the
unit price. Taxes, miscellaneous
fees, and association dues are some of the things that the buyer has to pay
for, before he can move in. Banks also have charges when you get a loan. Before
you buy, you should know how much you really are paying for the “luxurious”
property.
4.
Freebies – Nowadays, you can easily get a new
32-inch flat screen L.E.D. TV just by reserving a condo or property. If you are
not getting one, try asking for one. Freebies have been used by sellers to
“pressure” buyers to buy ASAP. If you are buying in the next couple of months,
you might be able to turn the tables on the sellers. You may check out several
projects and use what others are giving you to ask for more in your chosen
developer. If they will give away an IPAD this month, most likely they will too
next month.
5.
Agents - Due to the property boom in Cebu, there
are so many people now selling property. Some full-time, many part-time. One
might say it is all about trust and integrity. You have to consider the information
that your agent is giving you. An in-house agent will give you the best
information when it comes to a certain project. In-house personnel are trained
by the developer to focus on selling a particular development. Brokers meanwhile are the best when you
want choices. Full-time real estate brokers can give you decent information in
many projects. If someone offers you something, ask them if they are brokers or
in-house.
Hopefully, the property boom will continue in Cebu in the
next couple of years. The local governments could play a key role in helping
the industry survive the looming “tough times” ahead. The city government of Cebu should know what are the
upcoming projects in Cebu and how it will affect the city as a whole. While
many are campaigning against flyovers, they do not realize that these
skyscrapers will have bigger effects on the city as a whole. Just imagine, the traffic in the narrow
Gen. Maxilom Avenue when all the proposed condos will be turned over in the
uptown area. The proposed traffic materplan should take into consideration all
the building permits approved by the OBO or else, it will become outdated in
three years time. Cebu is fast becoming a mini-Makati, no matter what happens
in the property segment in the near future as more people are flocking to the
city for work, school, or retirement.
It is time I guess to encourage developments in the
outskirts or suburbs, rather than continue congesting the central district.
Thank you for sharing good news about Cebu.
ReplyDelete