Antonio V. Osmeña
Estatements
MAINLAND Chinese are being drawn to Hong Kong in part by favorable exchange rates that have seen the US dollar-pegged Hong Kong currency weaken against the Chinese yuan. Home prices are up 30 percent this year, fueled largely by plenty of liquidity and some of the cheapest mortgage home rates ever seen in Hong Kong.
Mortgage rates have sunk so low—less than one percent in some cases—that the Hong Kong Monetary Authority, the city’s de facto central bank, issued a letter to Hong Kong’s banks last week warning that “the present intense price competition is not sustainable.”
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Low deposit rates and easy money have spurred the rise in home prices, even as unemployment is at a multiyear high, thanks to Hong Kong’s heavy reliance on the financial sector and Chinese trade. A local businessman paid HK$24.5 million last week for a one-bedroom apartment, according to Centaline Property Agency, a leading Hong Kong broker. The boom in Hong Kong’s property market in the once-unglamorous Kowloon district has suddenly made its buildings some of the most expensive properties in the planet, thanks in part to strong interest from mainland Chinese investors.
A penthouse unit in a luxury condominium known as the Cullinan is on the market at HK$300 million (US$38.7 million), or about US$9,675 a square foot. On the contrary, the property market in Cebu is in a temporary doldrums. Are Cebu’s listed property companies heading for a train wreck?
The Sino Group, one of the leading property developers in Hong Kong, is leading an eco-friendly building initiative. The group has well-thought-out architectural planning and innovative design, as well as sophisticated property management and total commitment to make a positive difference in people’s lives. It has proactively adopted an eco-friendly approach to business, integrating green initiatives in its daily operations and raising awareness of environmental issues among tenants and staff.
Today, there are some malls that have adopted green development, such as Ayala and Parkmall. Ayala’s Terraces and the Parkmall development are the first green shopping areas in Cebu and feature the metro’s first huge gardens—combining scientific insights from horticultural, engineering and environmental experts.
Cebu, through various eco-friendly processes and innovations, should establish a green business culture that enables sustainable development. It is now time for green design and construction, for developers to formulate comprehensive green management policies and implement eco-friendly practices to provide quality working and living environments.
With the increasing emphasis on green building and eco-friendly management, it will continue to transform the market and promote the rise of more intelligent green developments. The Cebuanos have a responsibility to build and work in a way that safeguards the environment. If we are to have a better future for tourism, critics believe that tourists, tenants and residents must share such concern. Community leaders and politicians should be committed to pursuing earth-friendly measures and raising green awareness among the public.
It would be good if the Aboitiz Foundation Inc. initiates extensive green management seminars or lectures so as to qualify some individuals to become green ambassadors. These individuals will be tasked to promote green management and awareness among real estate owners and developers. The green management program includes a range of green features and energy-saving equipment, such as a water-cooled air-conditioning system with an automatic condenser tube cleaning device has achieved 30 percent energy savings, with a payback period of 12 to 18 months. Another green feature is the use of LEDs to save 85 percent energy in lighting.
Considering the proximity of Cebu to mainland China, the potential of Chinese investors could be a strong influence on the real estate sector. Prior to the world economic crisis, the sale of Cebu’s condominiums was mostly to overseas Filipino workers and foreigners involved with Filipinas. The failure to anticipate the world economic crisis will cause an oversupply of condominium units in Cebu. Once an oversupply of housing/condo units saturates the real estate market, economic inability to adjust the supply to active demand will create an abnormal vacancy ratio and competitive pricing conditions, upon which real estate depressions have fed in the past. High-end rentals will be the first to suffer from vacancies.
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