Are we nearing a real estate bust?

One can’t help feel a little lost when seeing all those real estate agents scurrying to sell one condominium project after another. This has been going on for years now without let-up, most especially for housing and office leasing.

Short of seeing the ghosts of the Asian contagion of 1997 that started in Thailand caused by a real estate property bubble bust, the unease lies largely in an absence of hard facts from our government regulators as to just how much the market can really take.

Sure, overseas remittances as well as the profile and numbers of employed Filipinos abroad continue to rise. We’re not just seeing more of our countrymen taking on jobs abroad; we’re also noticing that the jobs are better paying.

Consequently, this had been reflected in the uptake of the upper and high-level residential building projects, largely in condominium units, in recent years. But these days, we’re seeing real estate developers in the housing sector moving to the lower end of the spectrum.

Target buyers are start-up families belonging to the middle class: professionals in local management jobs with combined salaries of P100,000 a month, or entry level single executives who have the excess cash to invest in a small one- or two-bedroom condo unit.

Market ‘forecasts’

While we are regularly bombarded by reports from private local and international brokers on the state of real estate in the country, glowing forecasts should be challenged, especially since these are more self-serving and these companies really want to promote the sale of projects even before any ground is broken.

But who will really challenge such market forecasts and provide credible data on demand and supply forces that govern the real estate market?

We are seeing smaller real estate companies being formed, many funded by pooled capital from individuals looking for better earnings for funds that have been performing badly in banking instruments.

Of course, the target buyers are no longer those who have the spare cash to buy those upscale condominium units. Many of these new aspiring residential owners are banking on Pag-IBIG to bankroll their property acquisition.

This is now a riskier market segment, and as such needs more overseeing from our regulators. On the government side, the Housing and Land Use Regulatory Board is mainly a policing power that enforces existing government laws on land use and zoning regulations. So if you have an issue against a real estate developer, then the HLURB is the agency to go to.

Absent regulator

Otherwise, a governing body overseeing the whole country’s land administration is yet to be born, as apparent with the number of bills on the subject pending in both chambers of Congress still in various stages of discussion and nowhere near consolidation as a law.

A national land use policy continues to elude the country’s 80 provinces, thus failing to create a semblance of order on how the country’s total land area of 300,000 square kilometers should be utilized for maximum productivity.

Subsequently, we see land use projects rising helter-skelter seemingly without rhyme or reason. This is apparent even with our export processing zones that encourage manufacturing companies, called locators, to open shop and avail of generous tax incentives in exchange for job openings.

Before it is too late, the government must determine if indeed there is a market for the new and upcoming real estate projects in the pipeline.

History has told us that property development continues to be a vulnerable area that affects not only the local host countries’ economy, but even the whole world.

She-faring students

We make way for some readers. John Denne comments about female students in a maritime school where he resides. He writes: “Further to your interesting article concerning the surfeit of maritime students, I live near such a college here in Lucena.

“What has struck me and my wife is the sudden appearance of large numbers of female students resplendent in their beautifully tailored uniforms.

“I confess that I know nothing about modern seafarers’ tasks, but it does seem to me that equal opportunities are unlikely to abound in this particular profession; moreover I would even go as far as to suggest that the average employer of newly qualified seafarers would be very hesitant to place one young woman amongst the otherwise all male crew.

“I wonder just how many of these young ladies will ultimately find themselves employed in the job they have studied.”

I, too, find the recruitment of females in the shipping industry – unless as part of the kitchen or onboard management staff – somehow intriguing. Perhaps the Maritime Industry Authority (MARINA) will be able to give some answers to this concern.

More crime, more traffic

From Jenna Hugo, another reader, who is asking for a solution to the recent rise in crime and traffic incidences in Metro Manila. Let’s hear from her.

“I would like that, via your column, a solution be given to the upsurge in the crime and robberies in our city the past days. Likewise, the traffic along EDSA has become unbearable.

“I believe the President of our country and the newly installed PNP chief has to act now to stop this wave of violence. It seems nothing is being done.

“If we intend to host the APEC Summit and the FIBA ASIAD where tourist and delegations will abound, just one death or (violent act) happening to anyone, and the country’s efforts to regrow (will have become) useless.”

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Should you wish to share any insights, write me at Link Edge, 25th Floor, 139 Corporate Center, Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at [email protected]. For a compilation of previous articles, visit www.BizlinksPhilippines.net.