5 mid-year tips for homebuyers, developersBy Tessa R. Salazar
Philippine Daily Inquirer
With the second half of 2013 commencing, it’s an opportune time for would-be owners and developers to assess their positions and take note of property experts’ tips for the remaining half of the year.
1 The time to buy is now. “For prospective first-time homebuyers, now is a great time to buy because of the all-time low-interest rates,” quipped Julius Guevara, Colliers International’s associate director for valuation and advisory services and consultancy research head.
“However, if you are buying, you should always keep a realistic budget in mind. Also keep in mind that the payment levels for down payments amortized over a period of two to three years being offered by developers would likely increase once it is time to take out the balance with a bank, so those calculations should be made first before one decides to sign a sales contract,” added Guevara.
2 Watch out for those maintenance costs. “Developers and buyers should be aware of the practical ways to ensure property values are well-protected. As the industry has become increasingly commoditized, developers and buyers can (protect) their investments, both from competition and the property cycles,” said Claro dG. Cordero Jr., head of Jones Lang LaSalle’s research, consulting and valuation.
“To achieve this, developers and buyers should ensure that the developments are constructed using high-grade, sustainable technologies and materials that will (slow down) the rate of obsolescence and keep the cost of maintenance low, thus withstanding market pressures due to tightening competition and evolving property cycles,” Cordero added.
3 The trust between buyers and developers is based on the future, too. “Fundamentally speaking, developers must future-proof their business models, (they must) explore new assets or socioeconomic classes and calibrate and retool their internal systems and account management infrastructure,” said Enrique M. Soriano III, Ateneo program director for real estate and senior adviser for Wong+Bernstein Business Advisory.
Soriano explained that in order to grow sales, developers should expand their channels and, most importantly, brand their organizations. The key is sustainability and having that compelling strategy.
“This is where only a handful of seasoned developers I know are compliant. The rest will likely learn the hard way if and when markets slow down,” Soriano said.
He added: “Just like the equities market correcting itself, the property sector will naturally soften at some point. Selected geographical areas will get saturated and target buyers will have more choices but little time. When we enter the ‘commoditization’ phase, homebuyers (the end users and investors) will inevitably base their purchasing decisions primarily on trust.”
4 Highlight what makes your condo different. Guevara stressed that for developers, differentiation is key.
“Condos in the same price segments now all look the same, so developers should think of ways in order to give more value to their clients.”
5 Pay attention to high-end developments. “Despite lower cap rates, investments should be more secured in the premium segment versus the other grades because of the relatively higher demand for the prior than the latter, and that, the middle-income developments should still be mainly geared towards end-users/owner-occupiers,” quipped Karlo Pobre, Colliers International’s research and advisory services manager.
“Moreover, we have also been getting more inquiries among expatriates who have been looking for three- to four-bedroom units, a supply (segment) that has been limited in the market. Besides this, the demand for larger unit sizes of one- to two-bedroom units has also increased with requirements from international schools and institutions, the gaming and hotel industry, and from among the BPO firms. While demand for leasable properties remains high in Rockwell, Makati and Bonifacio Global City, the Pasay-Manila area has also become a preferred destination for expatriates engaged particularly in the Pagcor Entertainment City,” Pobre added.