The Power of Now

by Steve Van Derodar

  | Pre-construction photo from SERA GROUP via SVDerodar

It’s November! In a couple of weeks, 2021 will be over, and here comes another year when we revisit some of the most important plans we have been having in our minds. Understandably, our primary goals may have been put on hold due to the pandemic. Is purchasing a Philippine property one of those?

For as long as I can remember in my selling career for Philippine Properties, everybody wants to invest in high-rise properties except for others who are into house and lot developments. Some of them successfully did, while others, for some reason, didn’t quite get to achieve that goal within their expected timeline. Perhaps, some aren’t sure what to buy and, in most cases, afraid of the financial commitment in such investment.

As they say, the best time to have bought a property must have been 20 years ago, and the second-best time to buy is now. Prices from years back are never the same, and you can’t bring the price down in the future. Of course, timing is relative, as many of us could have other priorities. But the premise stays the same. Lost time could be lost opportunities when building equity or cashing in on projected income if the purpose is for an income-generating property.

The property sector in the Philippines remains a booming market as many Filipinos worldwide yearn for decent housing with appreciable amenities. Most of these properties are easy to rent out due to their growth potential and booming economic activity. Yet, many of us also go for the high end, where the best-performing properties in appreciation could be located. When you look at the inventory across market segments, whether a starter investment, middle-market, to upscale, the Philippines is continuing to cater substantial developments across markets.

In recent years, they have touted the Philippines as a breakout nation regarding property investments exceeding expectations because of the increased demand for housing. And because of its affordability, term payment schemes, especially with pre-construction offerings, many Filipinos and foreigners can purchase properties. Unlike other markets globally, they spread out overall equity over the construction period with a small down payment as necessary, dependent on which developer.

“As they say, the best time to have bought a property must have been 20 years ago, and the second-best time to buy is now. Prices from years back are never the same, and you can’t bring the price down in the future.”

There is a solid reason to believe that the Philippines is a great country to engage in Philippine property investment as, according to World Bank, “The Philippines has been one of the most dynamic economies in the East Asia Pacific region. Average annual growth increased to 6.4% between 2010-2019 from an average of 4.5% between 2000-2009. With increasing urbanization, a growing middle class, and a large and young population, the Philippines’ economic dynamism is rooted in strong consumer demand supported by a vibrant labor market and robust remittances. Business activities are buoyant with notable performance in the services sector including business process outsourcing, real estate, tourism, and finance and insurance industries. The Philippine economy has also made progress in delivering inclusive growth, evidenced by a decline in poverty rates and its Gini coefficient. Poverty declined from 23.3% in 2015 to 16.6% in 2018 while the Gini coefficient declined from 44.9 to 42.7 over the same period.”

Now that the pandemic is waning, reports have it that developers have started picking up, and some of them have reported a spike of sales take-up leading to recovery. What a sign of solid promise for would-be investors and new home buyers.

When you can do it sooner and get approved for a mortgage commitment, why not do it now? Deferred Cash and outright cash payments are always viable options for those who are willing.

Time is really of the essence, and while others may be ahead, it doesn’t mean we couldn’t make it to our goals. At what level of investment you may consider, you may as well achieve them. I now remember meeting a very charismatic immigration lawyer in a mall in Makati City 15 years ago, who happens to be a New Yorker just visiting Manila for the holidays, and while I tried to talk about the prospect of inviting him to our showroom, he nodded and said, “Well, I actually have one unit there,” pointing out the building that I was supposed to show him. I could just smile about it, and likewise, he did. Can you imagine how much his property has appreciated over the years? And how much rental income must he be making year on year?

The power of now is compelling as what the future holds for any time-sensitive, value-enhancing real property acquisitions. You can make it happen.

The good news is that if you are considering bank financing, interest rates are desirable these days. And loans now can be processed via Philippine National Bank (PNB) in New York. Of course, with other Philippine-based banks, you can still get a loan provided you must have an Attorney-In-Fact. Most banks require that home loan borrowers be at least 21 years old, with the maximum age at 65. However, there can be differences between financial institutions. Union Bank, for example, has a maximum borrower age limit of 70 years old, not the standard 65. Sterling Bank of Asia, on the other hand, has a total age of 60, although borrowers older than this can still apply with a co-maker. Filipino citizens are all eligible to borrow home loans from banks in the Philippines. Foreign applicants, or Filipinos who are no longer citizens, would have to consider banks that lend to an international clientele. Among those known to offer loans to both foreign nationals and natural-born Filipinos are the Philippine Bank of Communications (PBCom), the PNB, and Rizal Commercial Banking Corp. (RCBC).

As 2022 approaches and as things get better, reconsider getting into your property acquisition goals, and for sure, it would get you to the results that you have been hoping to attain. The power of now is compelling as what the future holds for any time-sensitive, value-enhancing real property acquisitions. You can make it happen. We can make some decisions, numbers to run, and all other factors to consider. A great find is maybe just what you need, small or big, or else, it could be now or never.

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(Stevenson’s experience in Philippine Real Estate spans more than 15 years. He has been involved in horizontal, vertical, vacation, and commercial properties. He has worked as an International Property Specialist to markets in Asia, Europe, and North America with Ayala Land, Federal Land, and Century Properties. Through PhilHouseHunters, he offers real estate investment opportunities, marketing, and consultancy with a key focus on Metro Manila and Mega Cebu areas. Visit www.philhousehunters.com. Email at derodarsales@gmail.com.)

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