I am not recommending that people buy at this point necessarily, it depends on the context and opportunity. More than anything else I am recommending that people prepare to buy property, and very specifically I am recommending Japan (high yields because it never really recovered) and the Philippines because of the structural changes there, high population growth, etc. See the free chapter I offer on the Philippines reforms on the foreclosed website.
Lastly asset prices are falling a great deal in the USA, Britain, Australia because they rose a great deal, as did debts. This did not occur in the Philippines. Debt levels in the Philippines are just 27% of GDP in the Philippines. That is a lot of untapped leverage. That will take some years to unfold, though it might be quicker than you think. If Western markets are more regulated, these interesting products might be introduced in Asia. Maybe not, but there will be some interest by Western institutions to open up the banking sector in places like the Philippines. For this reason property prices in the Philippines will not fall so much, and they will be held up by inflation. So money being debased, but asset prices rising, so I think the time to buy is closer than you think in these 2 countries.
economy is having ripple effect worldwide. why would you recommend investing property at this point?
I would add that this is not the end of the problems in the USA, but the rest of the world will become more positive. There will be a shift in focus to Asia, and a property boom. It will take time to unfold. It won't be as fast as Western property boom because there is not the capacity to leverage the banking system yet because there is still need for reform.
I would think you should buy foreclosed properties during economic crisis.
Well, you will need to define crisis. Crises take make forms. We have just had an equity market 'crisis' but we have yet to feel the impacts significantly on the real economy. I would not be surprised to see a huge rally in markets from herein because of the recapitalisation of the banks has just created a lot more power for banks to lend. Oh, and interest rates are falling. The outlook is hopeless in the USA, so where is all that lending power going to go? Asia, because of its economic & population growth outlook. You can buy in the USA, but I would wait for property to bottom. There is so much inventory. ie. 1-in-6 homes in foreclosure. Mind you there might be a government bail-out. In Australia, the govt is offering $21K grant to new home buyers (residents who did not get the previous benefit I guess). That stimulates activity. For that reason, I wouldn't wait too long, but give it another 3-4 months I say in the USA.
News say that Philippine real estate is going to crash! I personally think though that many condos in Manila are quite over priced (as they can't be rented at 10% of their original price anyway). Also, a lot of homes for sale right now in many places in Qc etc are oversold and overrated and mostly has a lot of features that do not cater to needs of buyers. I have been looking for a decent place to buy in QC and I got an offer of a desperate seller for a property worth around Php 16M (so many features not needed) and really the value of the property is just a max of Php 8M-10 M (my personal opinion).
News say that Philippine real estate is going to crash! I personally think though that many condos in Manila are quite over priced (as they can't be rented at 10% of their original price anyway). Also, a lot of homes for sale right now in many places in Qc etc are oversold and overrated and mostly has a lot of features that do not cater to needs of buyers. I have been looking for a decent place to buy in QC and I got an offer of a desperate seller for a property worth around Php 16M (so many features not needed) and really the value of the property is just a max of Php 8M-10 M (my personal opinion).
I agree, but bear in mind that most of the properties listed on the internet are targeted at foreigners & balikbayan. You really dont want to buy through that forum. I prefer to buy through regional searches. At the end of the day those people will come down if they want to sell. Most are in no hurry so they live in hope. There are a lot of sellers waiting for their price to be hit, and they will get it because of inflation. You can argue that property prices are too high, or that the currency is too high (because of repatriation of earnings/remittances) and excess money supply creation.
I don't think that OFW $$ will bring any help in fact their purchasing power is dwindling.
The industry is also continuously challenged by inflation and the declining purchasing power of overseas Filipinos, noted Santos.
In the residential sector, developers are currently reviewing their business plans to redirect initiatives on new target markets given the impact of the US financial crisis on overseas Filipino workers primarily US based OFWs.
I don't think that OFW $$ will bring any help in fact their purchasing power is dwindling. The industry is also continuously challenged by inflation and the declining purchasing power of overseas Filipinos, noted Santos. In the residential sector, developers are currently reviewing their business plans to redirect initiatives on new target markets given the impact of the US financial crisis on overseas Filipino workers primarily US based OFWs. By ALBERT CASTRO [ Malaya.com.ph ] October 23, 2008
Well the strength of the peso seems to suggest otherwise. I think there is confidence that economic weakness will see expat Filipinos sending more money home. Purchasing power is just one issue, there is also a desire to help family. Also a great many Filipinos abroad will be locked into loans, which brings money into the economy. You might also think there will be fewer loans, but consider the number of expatriates who will now work longer or change their plans and retire early because of losses on investments or the job losses, and thus move to the Philippines. This is the same for foreigners who feel they can't afford to retire in their home country. Going against this trend is generous welfare states in their home country.
