SMDC started slow when it developed its first condominium project in 2003, the Chateau Elysee in Bicutan, Paranaque City. The project is composed of 24 residential buildings that are six to seven storeys tall. This was  followed in 2006 by Mezza Residences, a 38-storey four-tower condominium at the corner of Aurora Boulevard and Araneta Avenue adjacent to SM Sta. Mesa.

The company started its aggressive drive in 2007 when it developed Lindenwood Residences in Susana Heights, Muntinlupa City. It is SMDC’s first and only subdivision project with 390 individually saleable lots on a 23-hectare property.

SMDC targets what it calls the “premium middle class market.” It carries two brands – SM Residences that caters to young upstart families and M Place that caters to young upwardly mobile career-oriented individuals.

Within a short period of time, SMDC has developed 16 residential projects, 15 of which are in Metro Manila and one in Tagaytay City. Six projects are completed and ready for occupancy, the rest are either under construction or nearing completion.

In its October 2011 report, Manila Bulletin cited the study made by Colliers International Philippines disclosing that:

SMDC sold the most number of condominium units in Metro Manila and attained the highest amount in terms of sales values for the first half of that year… It held the same record in 2010 and 2009.

With 90 real estate players in the condominium housing segment, SMDC captured 22% market share of this segment. For 2012, SMDC plans to launch four or five new projects.

As it is, with SMDC’s close to 2,000-strong salesforce, the company is still direly in need of additional Licensed Real Estate Brokers and agents or Sales Persons. To cope with ever growing demand for its projects, SMDC launched its second Marketing Division just this month.

The need for more sales people will become even greater if the following news from Business Mirror pushes through:

…the government-run Bases Conversion and Development Authority (BCDA) has been tasked by the Aquino administration to privatize the 33-hectare South Bonifacio, in Taguig City… The property is composed of lands presently occupied in part by the Army Support Command and Special Services Unit of the Philippine Army and in part by the Bonifacio Naval Station and Philippine Marine Corps of the Philippine Navy.

Click this link to see the satellite map of South Bonifacio (move your cursor in the middle of your screen where the crosshair (+) is and the place will light up in yellow). Click it and you will see a great description of it by a friend, Aaron, who is a fellow Filipino Wikimapia moderator.

North east are McKinley West and McKinley Hill; Further north east is Bonifacio Global City. Just one kilometer away, south west, is Megaworld’s Newport City.

The same report added that: “…SM Land, Inc. has already submitted to the BCDA an unsolicited offer to develop the property;” it is the first company to do so. Please read the complete report of the Business Mirror above to see details of SM Land, Inc.’s offer.

If BCDA awards the privatization of South Bonifacio to SM Land, Inc., what do you think will be its implications on SMDC’s development plans? How many condominium projects will it put up? Will it have enough people to market its projects, both current and forthcoming?

If you are a PRC-licensed real estate broker, or you already own a realty brokerage firm or you are a member or officer of a chapter of a certain real estate brokers association like REBAP, PAREB, etal. and you want to be accredited by SMDC, kindly get in touch with me using the Contact form above or make a comment below. I will refer you to my friends at SMDC.

Thank you so much.

Jun Sanchez

So far, Robinsons Land Corporation (or RLC) is the biggest real estate developer to invest in what could possibly be the biggest property development in my home city. And this makes me wonder… Why?

Malabon City has earned the unenviable reputation of being The Flood Capital of Metro Manila.

It has 21 barangays and most people who do not live in Malabon think that the entire city is flood-prone. That is not true. There are at least four barangays that remain generally or partly flood-free regardless of how heavy the rain is, and that includes the barangay where I live – Tugatog (which means zenith or apex in English) – the highest elevated barangay in Malabon. The others are Barangays Acacia, Tinajeros and Potrero.

All four barangays are situated in the eastern-most portion of the city with a slope of 5%; the rest are generally flat. They also happen to be the gateway to the other cities of Metro Manila (kindly see the map). In short, if you live in one of these four barangays, you will not encounter flood when going to Caloocan, Manila, Quezon City and more during heavy or prolonged rains.

Click the following link to see the property that was bought by Robinsons Land in Barangay Tinajeros along Gov. Pascual Avenue where public transportation is available 24/7. Place your cursor in the middle to see it light up in yellow; click on it to see its description. On the navigation bar, choose Map Type then choose Google Hybrid to see the streets. Just two kilometers away to the east is Monumento in Grace Park, Caloocan City, an important transportation hub.

With no less than eleven banks just meters away from this property, it’s an indication that the area is highly commercialized and industrialized.

What is the best use for this land?

The property is no less than two hectares, maybe even close to three hectares – too big and unsustainable for a mall given the existing market. RLC’s best bet is to develop a mixed-use commercial and affordable residential condominium project on this property.

Who shall be the target market for these residential condominiums?

Malabon residents in the mid and western portion of the city, those who have grown tired of the frequent flooding but can’t quite leave Malabon for some reason or another, especially those who work or have businesses in the adjoining cities. Residents in Navotas City, farther in the west, are also likely buyers.

It’s a big gamble on the part of Robinsons Land to invest in Malabon City, but given the location of the property and the niche that I believe they will cater to, it’s a gamble that has the potential of a big pay back.

Thank you so much

Image courtesy of zip-codes.philsite.net

But with the way the Philippine National Railways (PNR) rehabilitated the Southrail Line – from Tutuban to the Bicol Region – what we have is a railroad system that is neither modern, fast nor reliable.

If our railroad system is to live up to its full potential, its modernization should be left in the hands of the private sector. And if there’s one company that has the motivation, vision, ability and financial muscle to do it, it is Ayala Corporation.

Let’s look at the timeline:

1987: During former President Fidel V. Ramos’ visit to Los Angeles, US financial and industrial giants Bechtel Enterprises and GE Capital signed a memorandum of understanding (MOU) with Ayala Corporation signifying their entry into a US$600 million railroad project.

… Dubbed the MCX or Manila-Calabarzon Express, it was to provide commuter and freight service between Metro Manila and the southern provinces of Luzon… Additional phases in the plan include extending the line to the southern port of Batangas City thus linking it to the deep-water port of Manila. An additional lateral section can connect Lucena City in the east to Sangley Point, Cavite in the west thus opening up the entire southern Luzon area to a modern transport facility…

The plan didn’t push through. But the vision and motivation of Ayala Corp. for wanting to modernize PNR’s Southrail Line at that time will be clear if you consider the succeeding events.

1988: Ayala Corporation spun off its real estate division into a separate company, giving birth to Ayala Land, Inc (ALI).

1989: Laguna Technopark, a 387-hectare industrial park was opened by ALI together with two other multinationals, in response to the government’s call for private sector participation in countryside development. Technopark straddles Sta. Rosa and Binan, Laguna and is now home to almost 100 of the biggest manufacturing/assembly corporations in the Philippines.

1990: Known for high-end commercial, office and residential projects primarily in Makati, ALI decided to test the middle-income housing market by establishing Laguna Properties Holdings, Inc. (now known as Avida Land)

LPHI acquired a 400-hectare property from the Yulo family in Sta. Rosa, Laguna and developed it into Santa Rosa Villages, San Jose Village and later, the Santa Rosa Estates. These were followed by various projects in Batangas and Lucena City in Quezon.

1995: A consortium of five local companies was formed to acquire controlling interest in what would later be called Metro Rail Transit Corporation Ltd. to develop and maintain EDSA MRT 3. These were Fil-Estate (a real estate company), Ayala Land, Inc., Anglo Philippine Holdings Corp (that owns National Bookstore among others), Ramcar (the car battery company that also owns Kentucky Fried Chicken, Mr. Donut and Tokyo Tokyo) and Greenfield Development Corporation (of the Camposes who own Unilab).

Anglo Philippine Holdings has minority stake in Shang Properties, Inc, the upscale developer of The St. Francis Shangri-La Place, The Shang Grand Tower, Shangri-La Plaza Mall, The Enterprise Center (in Makati) and currently, One Shangri-La Place – all are within spitting distance from MRT 3.

Greenfield is one of the biggest landowner in the country. Together with ALI, it has controlling interest in Bonifacio Global City. It has vast properties in Laguna. It is currently focused on its 11-hectare mixed-use development along Shaw Boulevard called the Greenfield District, just across Shangri-La Plaza, again just a stone’s throw away from MRT 3.

1999: EDSA MRT 3 started operation

2001: North Triangle Depot Commercial Corporation was incorporated by three of the original consortium-members of MRT 3 – Fil-Estate, ALI and Anglo Philippine Holdings Corp – to develop the 20-hectate TriNoma Mall. Did you know that this mall sits directly on top of MRT’s huge depot?

2005: ALI and Greenfield Development Corporation formed a joint venture to develop Ayala Greenfield Estates – a 350 hectare upscale residential development in Calamba, Laguna with an 18-hole, par 72 championship golf course designed by Robert Trent.

2007: Ayala Land launched Nuvali, a 1,800 hectare mixed-use development that straddles the cities of Sta. Rosa, Calamba and the municipality of Cabuyao in Laguna. It is envisioned to become the Makati Central Business District of the South. It is one of the country’s most ambitious real estate projects that will be completed in 30 years. The various residential developments in Nuvali are handled by its three units – Ayala Land Premier, Alveo and Avida.

April 2010: ALI established its fourth residential unit, Amaia Scapes, this time for the class C market. It offers house and lot packages from P605,000 to P1.25 million. Currently, Amaia has developments in Cabanatuan, Pampanga, Cavite, Laguna, Lipa, Batangas and Negros Occidental.

December 2010: The Inquirer announced that Ayala Corp was looking into the possibility of participating in the development of the PNR’s (Southrail Line) service to Southern Luzon up to Legazpi City in Bicol.

… the PNR line can directly link the Makati central business district to suburban communities being developed by ALI in areas in Laguna… It’s logical for them to participate in the development of that corridor. They have a lot of developments near the PNR line.

So far, nothing new has come up regarding this plan.

August 31, 2011: ALI puts up its fifth residential unit, the South Maya Ventures Corp. to cater to the largest but most neglected segment of the housing market – the underprivileged and homeless. Called “socialized housing,” each unit will cost P400,000 and below. Its first project was scheduled for launching within the last quarter of this year in Gen. Trias, Cavite. To remain feasible, expect succeeding projects to be located farther down south where lands are cheap.

The timeline indicates the following:

1. Bechtel’s and GE’s MOU with Ayala Corp. in 1987 to construct the MCX railroad project was meant to lay the groundwork for the latter’s future projects in Laguna. The freight service was certainly partly intended to transport cargoes to and from the various locators in Laguna Technopark. The commuter service was meant to “pull” its early middle-income real estate projects closer to Metro Manila.

With hundreds of real estate projects that have sprouted in Laguna and other provinces in the south since, plus the seventeen economic zones in Laguna alone, a modern railroad system is imperative and feasible now more than ever.

2. MRT 3 illustrates that those who have the greatest motivation to invest in transportation infrastructure are big commercial, office and residential real estate developers whose properties lie near this transportation line. An improved transportation increases demand for and, therefore, value of their properties.

It also indicates that ALI has the ability and experience in building and managing a modern transportation infrastructure.

3. With the pattern of its real estate developments, ALI clearly sees the high growth potential of the South Luzon Corridor. It is the only big developer that has invested a very large part of its resources south of Metro Manila. ALI probably knows something that other developers don’t.

The private sector is motivated to participate in the construction of transportation infrastructure not only because of the revenue they will gain from it but more importantly, because of the boost it gives in the demand for and value of their real estate developments.

And with the way Ayala Land has lined up many of its projects near PNR lines, it shall reap the biggest benefit from a modern railroad system in the south.

Thank you so much

Metro Manila has become what it is today because of the over-concentration of businesses plus recreational, cultural, and institutional facilities therein – elements that are barely present in many parts of the countryside.

An ideal economy is one wherein most if not all citizens see and feel economic gains (in varying degrees) wherever they may be. It’s a gargantuan task but I think it can be done; definitely not in this lifetime, but I do believe, slowly, it can be done.

One of the strategies to achieving this was clearly outlined by the National Economic Development Authority (NEDA) in 2004.

…spur economic growth for Bicol and Mindanao… development of the Southern Luzon Corridor as a strategy to decongest Metro Manila, and provide new opportunities for growth in the countryside… The Plan has in fact identified as one of its priority activities, the rehabilitation of the existing rail link to Bicol…Key roads and roll-on and roll-off (RORO) port facilities have been lined up for Mindanao… to provide access to product markets… PNR’s South Line will extend up to Matnog, Sorsogon, being the take off point to the Visayas and Mindanao.

Yes, for me, a major factor that will stimulate economic growth in the countryside is a modern, fast and reliable railroad system that will not only cater to commuters but will also transport cargoes (freight trains) over long distances.

PNR has already rehabilitated the so-called Southrail Line – from Tutaban in Divisoria up to the Bicol Region. However, the rehabilitation was poorly done. There appeared to be no resolute effort to really modernize the project. Most of the coaches or trains are second hand that were donated by Japan. Travel time from Manila to Bicol is ten hours, the same time it takes when taking a bus : (

By the way, our railroad system is also originally planned to extend North all the way to San Fernando in La Union.

How can a modern railroad system stimulate economic development in the countryside and decongest Metro Manila?

By opening up and increasing demand for real estate markets that were once unattractive for those living in Metro Manila.

A 2006 Dutch study (this is a PDF file) noted that:

… households are willing to pay more for housing near railway stations due to lower transportation cost and reduced travel time. As workplaces become more accessible, so do leisure areas…

Another study (this is another PDF file)noted that:

… the price of real estate is highest in city centers and decreases with every unit of distance from the city center. Thus, when some areas are pulled closer to the city center through an improvement in transportation, land values in these areas increase…

As households increase in these once unattractive locations (because of their distance to Metro Manila), commerce will follow thereby increasing demand for properties in these locations. As people increase, more commercial establishments, conveniences and, therefore, job opportunities will be generated that will further increase demand for properties.

Eventually, these areas will become the new urban centers that will become the source of livelihood and recreational facilities for people living farther along the line. Having been pulled closer to the new city center, demand for real estate in these locations that are farther along the line will increase. Population will increase that will lead to new commerce and so on and so forth. The cycle shall be replicated as you go farther and farther along the line. Again, this process will take decades to be truly felt. That’s why we have to start now!

And this is beneficial for real estate developers who shall then have greater options on where to build their succeeding projects instead of just focusing on Metro Manila.

And those developers who have already built their projects nearby will find the value of their properties enhanced.

Other economic benefits of a modern railroad system

PNR trains currently cater solely to commuters. For me, trains transporting cargo is as important as trains moving people. In the US, freight trains provide the following benefits:

From the food on our tables to the cars we drive to the shoes on our children’s feet, freight railroads carry the things America depends on. America’s railroads account for 43 percent of intercity freight volume — more than any other mode of transportation — and provide the most efficient and affordable freight service in the world. Every year, America’s freight railroads save consumers billions of dollars while reducing energy consumption and pollution, lowering greenhouse gas emissions, cutting highway gridlock, and reducing the high costs of
highway construction and maintenance. In addition, America’s freight railroads generate nearly $265 billion in total annual economic activity and sustain 1.2 million jobs.

Obviously, our country will never attain the same figures given the size of our economy, but we shall to a certain extent.

But given the sorry state by which our railroad system was rehabilitated, none of these shall take place. That’s why it’s important to leave its rehabilitation and modernization to the private sector – to a company with the motivation, vision, ability, willingness, clout and financial muscle to do so.

And that company is none other than… Ayala Corporation.

I will tell you why in my next post.

Thank you so much

image of freight train courtesy of popularmechanics.com

In its 3rd quarter 2011 report (this is a PDF file), Colliers International, a respected real estate service provider, disclosed that in Metro Manila, 90 high-rise residential buildings were launched in the first three quarters of this year. That translates to 25,000 condominium units.

We know that a flourishing real estate sector is a good indicator of a healthy economy. It leads to increased employment and the growth of ancillary industries like the construction/building materials industry, furniture industry, the appliance industry and more. (no one moves to a new house without bringing in at least a few pieces of new furniture, appliances and accessories : )

So, is the continuing growth in the number of condominiums being built in Metro Manila an indication that our economy is in a good state?

For me the answer is NO

Let us consider the following:

1. The Philippine Gross Domestic Product (or GDP)

Defined, GDP is basically the total output of ALL the services rendered and all the products manufactured in a country in a given year. The latest official GDP figure that was released in August 2010 by the National Statistical Coordination Board (or NSCB) was for the year 2009. Philippine GDP for 2009 was 7.68 trillion pesos.

2. Metro Manila’s Gross Domestic Product

Metro Manila registered a GDP of 2.8 trillion pesos or 36 percent of the country’s total output.

3. Metro Manila’s land area vis-à-vis the country’s total land area

Metro Manila or the National Capital Region (NCR) is one of the 17 administrative regions in the Philippines. It is divided into 6 districts with the City of Manila as the capital plus one municipality, Pateros.

Metro Manila occupies a total land area of 638 square kilometers whereas the entire Philippines has a total land area (including inland waterways) of 300,000 square kilometers. It means that Metro Manila comprises just 0.21 percent of the country’s total land area.

4. the Population

The latest official population survey by the National Statistics Office goes as far back as 2007. It projected, though, that the national population for 2010 would be 94 million. Metro Manila, with a population growth rate of 2.10% annually was projected to be inhabited by around 12.2 million souls in the same year.

Bottom line is 13% of the entire national population are all bunched up within just 0.21 percent of the country’s total land area but they are contributing 36 percent to the country’s economic output. Conversely, it also means that 87% of our countrymen are living in the remaining 99.79% of our country eking out a living to contribute the remaining 64% of our Gross Domestic Product, many, through some of the harshest working conditions.

It is the over-concentration of economic activities and opportunities in Metro Manila that continue to drive demand for condominiums therein. And this leaves some of the other 16 regions in the country with little of said economic activities and opportunities.

For me, this is a serious form of socio-economic inequity.

The booming demand for condominium in Metro Manila, therefore, should not be viewed as a sign of a healthy Philippine economy but rather as a symptom that the country as a whole remains as the Sick Man of Asia.

Thank you so much

Image courtesy of Flickriver.com

The information I am about to disclose are done purely through my own initiative. Moreover, the information I am about to reveal are not meant to sell the project as it won’t be for sale until October of this year. This is purely for announcement purposes and is meant to probably give you time to think about what might possibly become one of the hottest selling condominium projects around.

So, why am I making this announcement when the project will be launched a far three months from now? It’s because the developer is known to sell out some of its best projects in a matter of several weeks. To write about this project just before the launching will be too late.

The developer is one of the most prolific in the country whose projects are well known for their structural integrity.

The project is located at the corner of E. Rodriguez Sr. Avenue and 12th Street in Barangay Mariana. The place is part of upscale New Manila, Quezon City.

Here’s the actual image of the site:

To the west is Dona Hemady; to the east is Balete Drive and adjacent to the property is Tomas Morato Avenue.

Here are the details of the project:

Given the unit types available (there will be neither studio nor 1-bedroom units), the project is targeted mostly for start-up and growing families.

For those who are interested to receive future information about this project that will be authorized for public release by the developer, kindly get in touch with me by using the Contact Form above or via 447.6328 or through 0929.609.7142.

Thank you so much.

Jun Sanchez
Real Estate Broker
PRC Registration Number 4562

Image courtesy of: http://patentlawcenter.pli.edu

It’s called co-habitation wherein your family occupies parts of your house and rents out to other people those that you can spare. If you are open to such an arrangement, Fianchetto Homes may be just for you.

I have recently written about Fianchetto Homes. Read about it again by clicking this link.

It is situated on a flood-free real estate in Brgy Toro Hills, Project 8, Quezon City. The barangay is called as such precisely because it is shaped like a bull and is located on an elevated portion of the city. Fianchetto Homes is on the upper left corner of the succeeding frame. Click it to enlarge the map. To see the streets, mouse over Map Type then choose Google Hybrid in the drop down menu.

Unlike a condominium that costs between P80,000 and P100,000 per square meter on average, a unit at Fianchetto Homes, a townhouse development, costs only P29,000 and P32,000 per square meter.

It offers 3 spacious bedrooms and two toilet and bath plus 1 toilet or powder room. The second floor is where the kitchen/dining and living areas are but the living room can be converted into a fourth bedroom and the kitchen/dining into a common area.

Below are the floor plans of Fianchetto Homes with dimensions (I didn’t include the ground floor). Printed in blue are the areas of the kitchen/living area, the two bedrooms on the third floor and the masters bedroom. (Note: the areas were my best approximation and may vary from the actual areas of the units).

Below are pictures of a semi-finished unit. Pardon the pictures of some rooms; my digicam doesn’t have a wide angle lens : (

Below are sample computations for units at Fianchetto Homes.

If you find the 6 monthly payments for the D/P burdensome, let us talk and I will find a way to have it stretched for much longer than 6 months.

Say you have converted your living area into a bedroom, you may probably rent out 2 bedrooms and use the other two for your family. Note that the two bedrooms on the 3rd floor are larger than the masters bedrooms in most condominiums.

By renting out the 2 bedrooms to, say, a newly married couple and to a group of 3 call center agents at P10,000 per room, that will go a long way in helping you pay the monthly amortization.

For many of us, the hope of owning a house will require not just the usual sacrifices but radical ones. The approach I have discussed is meant for those who are willing to go to great lengths to own the house they live in. It’s a case of “if there’s a will, there’s a way.”

The prices of the units at Fianchetto Homes are P3.5 million and P3.8 million. There’s an ongoing promo wherein the next one unit to be sold will be subject to a P200,000 discount. Again if you want a more detailed discussion on the features and pricing of Fianchetto Homes, kindly read my past article about it.

For more questions, please get in touch with me using the Contact Form above or via 447.6328 or through 0929.609.7142.

Thank you so much.

Jun Sanchez
Real Estate Broker
PRC Registration Number 4562

Currently, Araneta Center, Cubao’s commercial hub is undergoing a rebirth with so many modern developments taking shape therein. All these are meant to bring the place back to its former glory.

One thing Cubao is well known for are the various modes of transportation in the area – the confluence of the MRT 3 and LRT 2 at the intersection of EDSA and Aurora Boulevard and the various bus and FX terminals plus the availability of so many taxis and jeepneys that puts one at the center of important destinations both near and far.

Adjacent to Araneta Center at the corner of P. Tuazon Boulevard and 14th Avenue is Portovita – a 26 story, two tower, mixed-use commercial, condotel and residential condominium development by Goldland Group of Companies. Founded in 1987, the company boasts of several condominium and townhouse developments in its portfolio.

See the satellite map below to see the location of Portovita. It’s on the lower right portion of the frame. Move your cursor over it and the other buildings and they will light up in yellow. Click them one at a time and you will see their descriptions. To see the streets, mouse over Map Type and choose Google Hybrid.

Around 20 to 25 percent complete, Portovita’s north tower’s 2nd to 17th floors will be dedicated to condotel units. The 18th floor up to the penthouse will be for residential units. The entire south tower, on the other hand, will be solely for residential use and will have a total of 314 units. There will be a total of 679 units for both towers including 20 commercial units.

Whereas prices of nearby condominiums in Araneta Center range between P95,000 and P100,000 per square meter, units at Portovita are currently priced at P75,000 per square meter. Thus, a 40 square meter unit in a nearby condominium will set you back between P3.8 and P4.0 million while the same sized unit at Portovita will cost you just P3.0 million. (Note: there will be an 8% increase on August 1, 2011)

What is a condotel and what are its benefits to the unit owner?

1. A condotel is a concept in development wherein the person who owns a unit gets to enjoy or use it for a certain number of days in a given year and earns income from it the rest of the year when it is operated and rented out to others like a hotel.

In the case of Portovita, a unit owner can use his unit for 15 days a year during the first 7 years. After the lapse of 7 years, he has the option to renew the contract for his unit to remain as a condotel or he may choose to take full control of the unit by permanently living in it or renting it out under his own price and terms.

2. Aside from earning income by having his unit rented out like a hotel, he will be required to pay association dues for just one year – on the first year of the condotel’s operation. From the 2nd to the 7th year, the maintenance and upkeep of the unit shall be for the account of the hotel operator. Payment of association dues will restart if the unit owner chooses not to renew the contract for his unit to remain as a condotel.

3. A condotel unit will also come complete with appliances, furniture and fixtures, lighting fixtures, airconditioning units, mirrors, drop ceiling, closet and dresser, keycard lockset, curtains, beddings/pillows, linens and coffee set. Said items are not included in residential units.

Two-bedroom unit at North Tower’s CONDOTEL ZONE, 41.25 square meters

Studio unit at South Tower, 21.75 square meters

Two-bedroom unit at South Tower, 45.25 square meters

Two-bedroom unit at South Tower, 43.50 square meters

If you want to take advantage of this opportunity to invest in a project that defines affordable luxury in the heart of Quezon City, use the Contact Form above so I can tell you more about Portovita. Or, you may get in touch with me via 447.6328 or through 0929.609.7142.

Thank you so much.

Jun Sanchez
Real Estate Broker
PRC Registration Number 4562

Many first time buyers have this notion that buying from a developer simply involves payment of two costs: the down payment and the monthly amortization. I can’t blame them, because most developers, in their desire to entice buyers, often initially specify only the down payment and the amortization and remain silent on other costs that ultimately inflate the final contract price of a real estate property.

How many times have you seen a condominium ad saying: “Own a condo unit for just P10,000 a month?” Believe me, it’s much more than that if these developers will be totally upfront about all the costs involved in the real estate transaction.

And why are developers not upfront about these costs? Because these costs tend to become “deal breakers,” i.e. potential first time buyers tend to be turned off by these additional costs, that many walk away from the deal after they realize that they should pay much more than the down payment and amortization.

E-VAT or Expanded Value Added Tax

Payment of the 12% E-VAT was made effective February 1, 2006. Among others, real estate developers are required to pay E-VAT under the following circumstances:

• Sale of residential lot valued at P1.5 million and above
• Sale of residential house and lot valued at P2.5 million and above

The amount specified above suggests that a lot or a house and lot that’s targeted for the middle class are the ones subject to E-VAT. Although it’s the developer who is supposed to pay the E-VAT, this tax is traditionally passed on to the buyers.

Thus, a lot that costs P1.5 million and a house and lot that costs P2.5 million will be subject to E-VAT amounting to P180,000 and P300,000, respectively, to be paid by the buyer – a significant and disheartening amount if he has a preconceived idea that payment of the down payment and amortization are all it takes for him to own a property.

Closing Fee

This cost is variably referred to by developers as Turnover Cost, Other Charges or Miscellaneous Fee. It is the amount spent by developers to transfer the title of the property to the buyer.

It consists of documentary stamp tax, transfer fee, registration fee, notarial and documentation fees. It even includes the cost of creating the title, lot plan. Others may include exotic sounding items such as Environmental Fund. Closing fee costs in the upward of 3.5% of the property’s contract price. I once sold an upscale lot with a net selling price of P2.5 million with a closing fee of P95,000.

My peeve with closing fee is the way developers time its collection. Since it is meant to transfer ownership of the property to the buyer, one would expect it to be paid by the time or just before the buyer has completed payment on the property. Fact, however, is, it is mostly required to be paid together with the down payment or 30 days after payment of reservation fee. Some developers offer payment terms of the closing fee that can be as long the term of amortization but the cost can go as high as 6% of the contract price.

These are the fees that first time real estate buyers should be aware of and save up for. Nothing is more frustrating than saving up for the down payment of your dream house and making adjustments in your lifestyle to pay the monthly amortization only to find out that there are other equally important expenses that you should have been informed of and prepared for.

I hope this post helps somehow.

Thank you so much.

Important: There are developers who are upfront about E-VAT and make it clear in their brochures if the tax is already incorporated in the Total Contract Price or not.

In some cases, closing fee may be as high as 5% of the property’s price – suggesting that there are developers who may be profiting from it.

Mahogany Place I and II are sold out but some parts of Mahogany Place III are still available. Accessible via C-5 Road, it is only a few minutes from Bonifacio Global City and the Makati Central Business District. This gated community is home to a variety of single-detached houses, townhouses and duplexes.

See the location of Mahogany Place III and places nearby in the satellite map below. It is at the lower right corner of the map. Move your cursor over it then click to enlarge the map. To see the streets, mouse over ”Map Type” and choose “Google Hybrid.” Zoom in or out by clicking the + or – sign button on the left. Click the arrow buttons to move around the map.

The following are images of the various house models in the said subdivision.

Single-Detached

Duplex

Townhouse

Just over a year ago, DMCI offered the fast-selling townhouse model unit Cielo (see picture on the right above) – a cluster of 5 attached houses.

Today, June 29, 26 units of a different iteration of Cielo will start selling in response to the market’s clamor for attached houses that offer better ventilation, natural lighting and bigger open spaces. This time, the Cielo model unit will come in duplexes. This means that all houses will be end-units. The following is the floor plan of this model.

Whereas the old Cielo models had lot areas ranging between 75 and 105 square meters, lot sizes of the new version of Cielo will be between 110 and 185 square meters. Prices start of P8.7 million. The 26 units will be distributed over two different blocks. 10 units will be located here, bounded by Thyme, Lavender and Rosemary Streets.

Since DMCI has yet to release an image of the duplex Cielo model, suffice it to imagine the following picture without the 3 inner units.

Below is the price list of the units, their terms and corresponding “Ready-for-Occupancy” dates.

With just 26 units available for sale, this posting is definitely already late as the units are expected to be completely taken within just a day or two. The units will be sold by lottery as there is a long queue of interested buyers.

Be that as it may, this post is meant to give you an idea as to the desirability of DMCI’s subdivision projects in Taguig. And since there are still lots available at Mahogany Place III, DMCI will definitely be coming out with new projects there in the future.

You may still contact me if you’re interested in Cielo as there are cases when units reopen when buyers suddenly back out for some reason. Expect an update of this posting in a few days.

Please get in touch with me using the contact form above or via 447.6328 or through 0929.609.7142.

Thank you so much.

Jun Sanchez
Licensed Real Estate Broker
PRC Registration Number 4562