OFWs advised against real-estate speculation
Note; Posted today, Dec. 15 at http://www.gmanews.tv
MANILA, Philippines - Overseas Filipino workers (OFWs) who buy homes locally with hopes of reselling them at higher prices better think twice amid a global crisis marked by plummeting real estate prices in the US.
Filipinos working abroad may find themselves clueless victims of a real estate bubble that might burst into a full-blown recession, economist Frederico Macaranas, Executive Director of the Asian Institute of Management's (AIM) Policy Center, said.
“We discourage overseas Filipinos from investing speculatively, meaning in homes they will not live in, which and they plan to resell because they cannot watch the prices," Macaranas told GMANews.TV in an interview.
Some overseas Filipinos are lured to buy second or third homes, mostly condominiums and apartments, to be rented out and later to be sold.
The AIM executive said that as absent buyers, OFWs would not be able to carefully monitor the movement of the market. For Macaranas, it is better for Filipinos overseas to buy homes they would use in the future.
“The overseas people sometimes invest in second or third homes because they were given the sales pitch that the prices will eventually go up. But remember, the real estate agents are only interested in commission. They don’t care if your prices collapse later," he said.
Macaranas also said that this type of investment saw the rise of subdivisions with big houses but with no owners as well as condominium units with absent tenants.
However, real estate broker Maritess Bigornia, owner of the Land Treasures Realty, disagreed with Macaranas’ assertions.
She said that the worst is over for Filipinos in the real estate industry.
“We are already at the tail-end of the crisis," Bigornia said in a phone interview. “We survived and we’re not thinking about that (falling prices)."
But fellow economist and former budget secretary Ben Diokno earlier predicted that the world economies would be fully resuscitated only by 2010.
“And that’s the most optimistic scenario," he said.
Diokno also said the Philippines would not register a growth rate higher than 3.5 percent in 2009, the year some analysts say the crisis would peak.
Bigornia asserted that Filipinos should not be prevented from venturing into speculative purchases in real estate since houses are tangible investments.
So far, Bigornia said eight out of 10 of their home buyers are OFWs, mostly professionals in the US.
Instead of fearing for the worst, Bigornia advised OFWs to look for trustworthy brokers who would look after their purchased homes.
According to her, it is important for a buyer to check whether the broker is accredited with the Philippine Regulation Commission (PRC), licensed, has a notable track record, and preferably has an office.
Bigornia also foresaw a better year for Filipinos next year.
“I don’t think next year will be gloomy as far as we’re concerned. Filipinos are resilient," she said. - GMANews.TV
