Reading the said article makes me realize that the same thing can happen in Cebu
in the near future. A lot of developers here are starting to build pricey condos
with agents marketing these properties for its rental income. I even had a friend contact me in Facebook
telling me that she would like to buy a condo and have it rented.
Well, rent is hard to project. Law of supply and demand
will definitely dictate how much you can charge. With so many condos being “pre-sold” now in Cebu, the supply side of rentals will not be scarce in the near future. I expect the market to turn in favor of the buyers in a few months time. If you are buying a condo, wait it out a bit and for sure, the developers will start offering discounts (don’t expect a 40% cutback like what CJ Corona had though), perks (trip to somewhere or a free stay at a nice resort), and other freebies (TV
, gas ranges, other appliance). Once the nicest units are taken, the developers will be hard-pressed to push the less attractive units.
Do not buy though if your main consideration is rental income. In Cebu, there are still so many alternatives for a 15,000 a month, 26 sqm. condo unit. At that price, you can still find a decent-sized 3-bedroom apartment in a good place in Metro Cebu. With over a thousand condo units set to be delivered in the next couple of years, you can expect a lot of competition. For people who are really bent on buying a condo soon, here are some things to consider:
Location – This is usually the main consideration when buying any property and the developers know this as well. A development at a prime location could be priced at over 100k per square meter. It is ironic to know that Cebu condos could be more expensive than Metro Manila
condos. A buyer should weigh if the unit is worth the price he/she is paying for. You also have to consider, your lifestyle in choosing a location. Is it near work, school, business, church, or a transportation terminal? Unlike in Manila
where people waste a big chunk of time commuting or driving to work, I can still see people who work in Mandaue
, while living as far as Talisay, commuting without any complaints. There is a premium in location but is 50% justifiable? You be the judge.
2. Developer – With tens of condo projects in the pipeline in Cebu, it is a big possibility some developers will not be able to reach their desired sales targets. Some might not push through with their developments. Does your condominium developer have the track record or financial backing to undertake big projects? Buying during pre-selling periods will definitely involve some risks. Dreams and ideas are sold by the millions everyday and some might not become a reality.
Price scheme and other fees – Because of intense competition, developers now are very creative when it comes to buying schemes. No downpayment, no interest, big discounts, Reserve now and pay later. There are so many seemingly attractive schemes to make you forget the big amount you are actually paying for your studio or 1-bedroom unit. In the end, you are going to pay it all. You may only be paying 8k a month now, but you will soon be loaning almost 2 million in 3 years. A lot of people buy property because they can afford the down payment, not realizing that they might not be able to afford the 80% bank loan
or balloon payment. Many agents and brokers do not take much time fully explaining this aspect. There are also other fees that may be collected apart from the unit price
. Taxes, miscellaneous fees, and association dues are some of the things that the buyer has to pay for, before he can move in. Banks also have charges when you get a loan. Before you buy, you should know how much you really are paying for the “luxurious” property.
4. Freebies – Nowadays, you can easily get a new 32-inch flat screen L.E.D. TV just by reserving a condo or property. If you are not getting one, try asking for one. Freebies have been used by sellers to “pressure” buyers to buy ASAP. If you are buying in the next couple of months, you might be able to turn the tables on the sellers. You may check out several projects and use what others are giving you to ask for more in your chosen developer. If they will give away an IPAD this month, most likely they will too next month.
5. Agents – Due to the property boom in Cebu, there are so many people now selling property. Some full-time, many part-time. One might say it is all about trust and integrity. You have to consider the information that your agent is giving you. An in-house agent will give you the best information when it comes to a certain project. In-house personnel are trained by the developer to focus on selling a particular development. Brokers meanwhile are the best when you want choices. Full-time real estate brokers can give you decent information in many projects. If someone offers you something, ask them if they are brokers or in-house.
Hopefully, the property boom will continue in Cebu in the next couple of years. The local governments could play a key role in helping the industry survive the looming “tough times” ahead. The city government of Cebu should know what are the upcoming projects in Cebu and how it will affect the city as a whole. While many are campaigning against flyovers, they do not realize that these skyscrapers will have bigger effects on the city as a whole. Just imagine, the traffic in the narrow Gen. Maxilom Avenue when all the proposed condos will be turned over in the uptown area. The proposed traffic materplan should take into consideration all the building permits approved by the OBO or else, it will become outdated in three years time. Cebu is fast becoming a mini-Makati, no matter what happens in the property segment in the near future as more people are flocking to the city for work, school, or retirement.
It is time I guess to encourage developments in the outskirts or suburbs, rather than continue congesting the central district.