Will overseas Filipinos stir up buying frenzy this Christmas?By Tessa R. Salazar |Philippine Daily Inquirer
Overseas Filipinos have been seen by some property analysts to take the Christmas break opportunity to view model units and make purchasing decisions this Christmas. However, other analysts disagree with this observation.
Enrique M. Soriano III, Ateneo program director for real estate and senior adviser for Wong+Bernstein Business Advisory, said the holidays are actually a wonderful time to scout for real estate deals.
“Interest rates are at an all-time low, and inventory is plentiful; December and January home sales contribute significantly to the country’s total annual home sales,” Soriano quipped.
He added that outside of December and January, traditional peak months are March, April, May, September, October and November, contributing around 10 to 12 percent of the annual home sales.
Soriano said: “First-time homebuyers and OFWs are the primary drivers for home sales. Marketing campaigns during the holiday months center around these twin markets.”
He added, “The Subdivision and Housing Developers for one, is organizing a Housing Fair this December, as many prospective buyers are expected to (make reservations), having their Christmas bonuses and remittances from overseas Filipinos to spend.”
No upward trend in years
Colliers International’s Julius Guevara, associate director, valuation and advisory services and head of consultancy and research, said: “Overseas Filipino workers significantly contribute to the real estate boom in the country. And they do make purchase decisions while on Christmas vacation, since they can view model units with their families and get their opinions.”
He added, however, that Colliers had been monitoring the preselling condominium market on a quarterly basis for the past few years, and the data for the past three years do not consistently show an upward trend during the 4th quarter.
Guevara said: “In fact, sales during the fourth quarter of 2011 was lower than the 3rd quarter, so the Christmas season cannot be a guarantee for increased sales velocities. Keep in mind that most families have other expenditures during the Christmas season, which compete with a housing purchase, so they may forego that purchase for a later time.
“Real estate companies that have strong marketing presence in places that are visited by families during the holidays (such as malls or tourist destinations) would typically benefit from the arrival of foreign-based Filipinos.”
On the other hand, for the ready-for-occupancy market, some buyers purchase their new homes before the Christmas season so that they can spend the holidays in their new residences, Guevara noted.
Colliers International’s Karlo Pobre, research analyst, consultancy and valuation services, agrees with Guevara’s observations.
“In 2010 and 2011, the take-up for preselling condos didn’t really build up toward the end of the year, but was rather varied per quarter. The volume of takeup has still been relatively a function of the number of launches (in whichever period of the year). Thus, the more launches, the better the takeup (at least for the last two years),” Pobre explained.
CB Richard Ellis Philippines said in a statement that actual statistics of properties sold during the fourth quarter are not monitored separately from the first three quarters.
“Two factors, though, may be deemed contributory to such increases (if there are any): 1) increase in money supply due to bonuses, etc.; and 2) the season in itself, properties may be considered as gifts, particularly to the wealthy who can purchase in cash. The increased liquidity insofar as the mid-market is concerned, allows the buyer the opportunity to raise the lump requirement (i.e. down payment) to initiate the purchase transactions.”
CBRE said that decisions for purchasing a property from the perspective of an OFW usually take a considerably longer time and are not driven superficially by a special season like Christmas. OFWs’ contributions during the fourth quarter are significant in terms of consumer spending (e.g. shopping, leisure activities), as the workers make the most of the time spent during the vacation with their respective families.
Pobre stressed: “Considering that some of the major developers have initiated sales and marketing arms overseas, this has already established grounds for interested OFW buyers to virtually look in to properties in the Philippines. Together with the growing presence of international brokers and with the help of the Internet, sales can now be facilitated anytime of the year.”