HABAGAT AFTERMATH, WARNING SIGNALS IN THE RESIDENTIAL SECTOR AND THE REAL ESTATE MARKET

Left: Poorest of the poor (travellerdane.blogspot.com) Right: Contented sleeping. (leaveyourdailyhell.com)

OVER 3 MILLION FILIPINOS ARE IN NEED OF DECENT HOMES
Left: Poorest of the poor (travellerdane.blogspot.com)
Right: Contented sleeping. (leaveyourdailyhell.com)

1 MILLION AFFECTED BY TYPHOON MARING; HUNDREDS OF MILLIONS WORTH OF CROPS DESTROYED; STOCKS PLUMMETS…

Big happy large and secured family

Big happy large and secured family

OH Give me a home,  a house , safe from floods, earthquakes,  crime, and disasters.  A home were my Family can grow, be happy, live healthy, with  serenity and unity.

Fresh, green and bright, a wonderful sight inside our home in Little Baguio, San Juan.

Fresh, green and bright, a wonderful sight inside our home in Little Baguio, San Juan.

Find me a Home, were Father, Mother, Sisters and Brothers may enjoy living, with peace of mind. This, my dream home, were I find true joy in family life. Provide bedrooms conducive to sleep and sweet dreams.  A Kitchen were good, warm food can be prepared and within a healthy environment.  A home were Dinning Binds Family with Nutritious Meals, a  Living Room that echoes laughter, the warmth of family fun and children playing under the sun, with a flower garden, of green plants to enjoy nature’s gifts, and GODs Blessings.

Unfortunately, this Dream Home, is more of a wishful thought to millions of Filipinos.  Just take the Geographical Areas of Metro Manila, and its adjacent municipalities, cities and provinces, we find poor people living in makeshift houses. These are mostly the informal settlers, or squatters.

Unfortunately, most of these areas,  occupied by poor families, were badly affected by the Floods, caused by Habagat torrential rains. Millions were affected by the disaster; there were loss of properties and worst of all, the loss of precious lives.

We can no longer allow, that every year, hundreds of lives are lost, thousands of areas devastated, and millions of homes affected by natural disasters, especially the yearly destructive floods. The Goverment must address this chronic and progressive problem. A sustainable, permanent solution must be done.  A strong political will to act and not just “react”.

Because  of this, problems and concerns,  we foresee a   shift of Housing Demand, and the Residential Sector. The movement of Housing, that requires homes to be “flood free”. Another homeowners concern, often includes the need of having a dwelling place be located away from an earthquake fault line, and that it’s safe from robbers, thieves and crime.

It is noted by most Real Estate Brokers and Realtors that demand for residential homes be Safe, Secure and Flood Free.  This can be seen in the posting of wanted properties ” to Buy ” or ” Want to Rent”.

By browsing the Internet, or going over the listings posted at the PAREB MLS , MANILA BOARD of REALTORS,  multiple listings  service, and other groups, one can surmise that the demand for homes that are safe, will be growing, much more after the “Ghost  month and Habagat rains”.

Supply of properties for sale will eventually rise. Those affected badly by the August Habagat Floods, are looking for alternative sites to transfer. The loss of property, the pain of having to survive with dirty water, the grief from loosing the life of a love one, are more reasons enough to seek a change, to move on to safety, and transfer residence, where the Family can live safely.

After the Rains, floods of water, and mud. We shall see …“flood of houses for sale”.  Those Residential Subdivisions badly affected, will experience a drop in real estate demand and prices. Flood prone areas will be appraised and valued lower than those that were not affected by the floods.

Take for instance San Juan City in Metro Manila where I reside, the high areas, of San Juan del Monte (of the mountain) which is high, has grown in value for at least 30% from last year. While, areas that got flooded waist up, are selling today at discounts of as much as 20% from its previous “asking prices”. The seller, will even say that it’s “negotiable” and therefore open to further reduction of price.

After weather forecasters has predicted, Typhoon “Maring” (International Name Trami), landed last Sunday, August 18, 2013,  on stormed-prone Philippines, The typhoon with  winds of 105 kilometers near at the center and speed of 19 kilomters per hr (kph), directly hit Metro Manila.

The typhoon, unexpectedly aided by Habagat, lasted for four days, (Sunday to Wednesday) and flooded Metro Manila and surrounding provinces. The total rainfall according to State weather forecaster Bernie de Leon, reached “671.6 millimeters (26.4 inches) in less than 2 days — more than the monthly average of 504.2 millimeters for August. It also exceeded the rain brought by  Ondoy (455 mm) in 2009 and the Habagat (472 mm) in 2012.

The large amount of rainfall, flooded 60% Metro Manila with large areas reaching as high as 2.1 meters (7 feet) of water.

The National Disaster Risk Reduction and Management Council said the heavy rains inundated around 415 areas in 68 municipalities in Metro Manila and nearby provinces Regions 1, 3, 4-A, 4-B, 5, Cordillera Administrative Region and NCR.

Also, NDRRMC  put the initial damage to infrastructure at P57 million and agriculture at P10 million specially in the provinces of Mindoro, Romblon, Ilocos Sur, Pangasinan, Rizal, Laguna and Benguet as  hectares of agricultural land and crops submerged under floodwaters.

The full-scale relief operations were needed to help the 223,991 families in 1,028 barangays in 80 municipalities and 35 cities across  Central Luzon, the Southern Tagalog provinces, the Ilocos region, the Cordillera region, and Metro Manila, which were hardest hit by flooding.

In this photo released by the Philippine Airforce Monday, Aug. 19, 2013 shows an aerial view of flooded houses in Laguna province, south of Manila, Philippines . Torrential rains brought the Philippine capital to a standstill Monday, submerging some areas in waist-deep floodwaters and making streets impassable to vehicles while thousands of people across coastal and mountainous northern regions fled to emergency shelters. AP source: Philippine Inquerer

In this photo released by the Philippine Airforce Monday, Aug. 19, 2013 shows an aerial view of flooded houses in Laguna province, south of Manila, Philippines . Torrential rains brought the Philippine capital to a standstill Monday, submerging some areas in waist-deep floodwaters and making streets impassable to vehicles while thousands of people across coastal and mountainous northern regions fled to emergency shelters. AP
source: Philippine Inquirer

Local authorities in at least three provinces, six towns and two cities declared a state of calamity. These include the provinces of Cavite, Mountain Province and Laguna; Narvacan, Sta. Marian, Gregorio del Pilar, Lidlidda, San Emilio and Candon City in Ilocos Sur; Masantol and Macabebe in Bataan; San Fernando City and the towns of Minalin and Guagua in Pampanga; Tarlac City in Tarlac; Obando, Hagonoy and Calumpit in Bulacan; San Mateo and Taytay in Rizal; Sta. Barbara and Dagupan City in Pangasinan; and Sablayan in Occidental Mindoro.

In Metro Manila, a state of calamity was also declared in the cities of Parañaque, Muntinlupa, Malabon, Pasay, and Marikina and the town of Pateros.

The floods paralyzed the capital on Monday and Tuesday, with schools, government offices, banks and the stock exchange closed. Fifteen flights were cancelled – 13 international and 2 domestic.

The flooded streets of Metro Manila during August ghost month. (ph.news.yahoo.com)

The flooded streets of Metro Manila during August ghost month. (ph.news.yahoo.com)

Another Danger Signal, which can be more dangerous, is that of the World Economic situation, especially now , even the Emerging Economies of the ASEAN are affected by loss of currency value, outflow of Foreign Investments, decline in market demand, and other financial issues that spells a ” clear and present danger”

As of yesterday, August 22, 2013, the  Philippine stocks slumped sharply after a 3day break due to renewed worries that the US Federal Reserve will soon cut its stimulus program. Also, minutes of last month’s Fed meeting, released yesterday, provided little fresh detail, prompting renewed outflows from emerging markets that had previously attracted foreign investors looking for higher return.

The benchmark index posting its biggest intraday retreat since October 2008, as local markets resumed trading after a three-day closure. The peso weakened to a two-month low and bonds dropped.

The Philippine Stock Exchange Index (PCOMP) declined as much as 6.9 percent before paring losses to 6.1 percent at the noon break in Manila. The gauge sank to 6,126.77, heading for the lowest close since June 26. Philippine Long Distance Telephone Co. (TEL), the nation’s largest phone company, fell 3.7 percent. SM Investments Corp. (SM), owner of the biggest shopping-mall operator, slid 8.4 percent. The peso weakened 1.1 percent to 44.14 per dollar, while government bond yields rose to a one-month high. Property was the most affected getting a down 7.79% change and still falling.

Mr. Agarao, said the PSEi could drop further but Mr. Pardo was optimistic that the country’s economic fundamentals would quickly spur a recovery.

Stock market at its lowest peak since 2008.

Stock market at its lowest peak since 2008.
source: http://www.bloomberg.com

The country’s stock exchange was closed and trading of currencies and debt was halted this week because of floods in Manila and August 21, a public holiday.

According to the statistics given by Philippines Property Finder, the average prices of real estate in our country went down to P2.53M.

In my analysis of the real estate market, base on the supply of condominiums, from the top six(6) Developers, SMDC, Megaworld, Ayala Land, DMCI, Robinsons and Century Properties, would total about 107,888 condominium units! Wow, Could this be the start of an oversupply in Metro Manila?

Are these Condominium  units really sold? Paid for? or just held with reservation money? The Real Estate Analyst must determine the absorption rate and velocity of sales , to see if the residential market is moving forward , or as what some real estate consultants have foreseen, condominiums are not moving (selling) as projected.

Flooded Subdivisions cause higher Demand in Flood Free Condominiums.

The saving factor here is the forecast demand of condominium living that is “flood free”. We foresee a movement of homeowners from the submerged subdivisions to transfer to safer dwelling places like that of high-rise condominiums located at higher grounds of Metro Manila.

“Locate in a Place near Work, Schools, Play or Pray,, at a Price You can Afford”

On the issue of affordability, the price range of 1.5 million to 3 million comprise of 56% market share. Where about 80% are earning less than the P20,000 take home pay. This is the minimum amount required to be able to afford a condominium home costing about average of say, 2 million.

I would advice those looking for safer and better homes to consider renting first before owning. In these way one can be sure of the stability safety and condition of the place and neighborhood. It was once said that “why should I rent if I can own”.  However today I dare say, “why own if u can rent…” because ownership has started to become more expensive in the long run. Even though cost of money is very low as well as interest rates.

I am addressing this fact to the 80% market segment earning less than P20,000 a month. Ownership will eventually be more expensive since it will require one to pay real-estate taxes, monthly dues, higher maintenance cost, and in the end exorbitant estate tax.

Cenel Place, a first class five star commercial and residential condominium prominently located in the heart of Malabon City.  Situated at 239 General Luna cor. Burgos St., Brgy. Concepcion, Malabon City it is easily accessible to local markets, schools and churches.

Cenel Place, a first class five star commercial and residential condominium prominently located in the heart of Malabon City.
Situated at 239 General Luna cor. Burgos St., Brgy. Concepcion, Malabon City it is easily accessible to local markets, schools and churches.

On a positive note, the Housing and Land Use Regulatory Board (HLURB) issued Memorandum Circular No. 07-A, last July 18, which amends, among others particular sections of Memorandum Circular No. 06 released  earlier this year.

The memo sets the requirement for developers of socialized housing projects who wish to be accredited, so that they can enter into joint ventures (JV) with developers of main subdivision projects.

The new circular favors previous developers who have built no less than 2,000 socialized housing units, to apply since the cap is down to 500 units and coverage was further expanded to include both horizontal and vertical developments with prices covered by BP 220 and PD 957.

Currently, Vice-President Binay said that he has accumulated enough funds (P50 billion) for resettlement sites. The program launched by President Benigno “Noynoy” Aquino III, was meant for relocating families living along dangerous areas like creeks, rivers and esteros.

In a statement, Vice President Binay, chairman of Housing and Urban Development Coordinating Council, said that they may actually reach the target earlier, since the government as of 2011, has relocated 34,000 ISFs living along danger areas. In the first half of 2013 alone, NHA had already assisted 13,251 families living in danger or flood-prone areas, with 20,750 more families projected to be assisted by the end of the year.

The initial batch of 80 ISFs were relocated to the San Jose Heights in San Jose del Monte, Bulacan last Monday.

In my previous article WATER, WATER ALL AROUND BUT NOT A DROP TO DRINK, I forecasted  heavy rains and floods in this year of the Water Snake. I also pointed out the dangers and opportunities of “Fire and Rain”, and the threats of  a water crisis. Not just flooding, but also the lack and shortage of potable water in distant areas and  islands.

Cuervos enjoying their family get together in their home.

Cuervos enjoying their family get together in their home.

Quoting to Mr. Jose Ma. Lorenzo Tan “Sadly, urban planning is often absent, or poorly implemented, in Metro Manila. When it is done, it is frequently done in silos. Planning is often done by corporations who rarely invest ‘beyond their fences.’ This pattern of development creates geographical pockets of dysfunction that, in extreme weather, become concentrations of risk. This is MALADAPTATION.”

In my next article, I shall give further details on the problem with squatters, expounding on the real and current problems plus realistic solutions and its impact on the economy specially on the real estate scenario.

source:

Business World

Philippine Inquirer

Philippine Star

Manila Standard

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3 Responses to HABAGAT AFTERMATH, WARNING SIGNALS IN THE RESIDENTIAL SECTOR AND THE REAL ESTATE MARKET

  1. fernando cuervo says:

    Good presentation. Great memories.

  2. fernando cuervo says:

    Find me a Home, were Father, Mother, Sisters and Brothers may enjoy living, with peace of mind. This, my dream home, were I find true joy in family life. Provide bedrooms conducive to sleep and sweet dreams.

  3. 100% agreeing with your article. All real estate developers, the National Govt & LGUs should align in terms of urban planning….

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