| Written by Dennis D. Estopace |
| Wednesday, 04 March 2009 17:13 |
| UNLESS developers resort to realistic pricing or give discounts for high-end real- estate properties, the market won’t see a significant movement in an already-stalling property sector, Jones Lang LaSalle Leechiu told the BusinessMirror. “We’ve been talking to a number of investors since the last months after [investment banking firm] Lehman Brothers announced huge losses and they planned to unload a number of properties,” Claro Cordero said. Cordero, who heads JLL Leechiu’s research department, talked to the BusinessMirror after the high-end luxury serviced apartments Raffles Residences launched the second phase of sales for pricey units at 10 floors of its 30-story project in Makati City. But Cordero said except for this project, which Dubai-based developer Kingdom Hotel Investments Inc. announced in 2007, “nothing much has moved in the high-end real-estate market.” “Developers [even] noticed marked decrease in demand for the products.” He added that if the situation persists in the next six months beginning January, the decrease will be felt “in capital values” of these products. This means those holding the properties bought at a premium years ago will find it difficult to sell these properties and gain from the sale. “The reason why developers are flooding the market with new supplies is because for the last eight years, there were nary major luxury projects prior to the current global crisis.” Cordero said previous to the announcement that the US economy is in recession, developers were banking on the overseas market. “But now, because even people abroad are quite unsure of their employment, they are probably delaying buying.” Hence, it would be wise, according to Cordero, for developers to look again at the local or domestic market and search for buyers. Specifically, Cordero said, developers should target the top income earner or old rich “with lots of “People who have the money will tend to go for higher-yielding instrument. The ultra high-end products; for them, these are very safe havens to park their money.” Cordero said these moneyed people would tend to lap up products offered by developers like Raffles Residences because low interest rates dampen their appetite to park their money in banks. “Second, the stock market hasn’t been attractive lately and may not be a very good instrument for most Cordero believes there will still be a market for high-end luxury real-estate products in the country. Nonetheless, he says, “there could only be few products that can still be bought at premium just like when the market was at its peak.” Cordero added that unless developers resort to realistic pricing or be able to give significant discounts by as much as 5 percent to the buyers, “they will find it difficult to attract investors or buyers.” “The sales will be insignificant to the overall property market.” TO LEARN MORE ABOUT THIS ALTERNATIVE HIGH YIELD INVESTMENT USING REAL ESTATE AS A VEHICLE, CALL (+63918) 9189236123 / 5166194 Realtor SAMUEL LAO, REBL#1341 |
Saturday, March 7, 2009
Crisis dampening demand for high-end properties
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