He said he wanted to interview me personally. You may probably imagine how surprised I was with his proposal. First thing that came to my mind was the interview would be about matters relating to kama sutra, _ _ _ _ s enlargement, Viagra, sexual staying power and the like… things that I am totally innocent of (e-hem!!).

Turned out he was researching on the condominium boom in Metro Manila which I have extensively written about.

Click the image to enlarge.

We met for the interview early September at SM City North EDSA. Jed, a very young lad who is probably half my age, made it clear that he was interviewing several people for his assignment and I was just one among them. Thus, although the interview went for more than 30 minutes, he said he would take only one salient point from my statements.

I totally forgot about this interview and didn’t bother to check if I was indeed cited in the article or if the article written by Jed was actually featured in FHM at all.

Yesterday, March 2, while browsing through my cellphone contact list, I happened by Jed’s number. I then called him and asked about his article. It turned out he emailed to me a PDF copy of his article as soon as it was published in December but his email probably ended up in my bulk folder and got trashed.

He emailed the same to me yesterday and I was happy to read that I was indeed quoted in the article titled “Build it and they will come.”

Below is a screenshot of the article’s opening paragraph.

As told, only one salient point of the interview was cited. It was short but it’s a quote nonetheless from a popular nationally circulated magazine.

If anyone among you wants a copy of Jed’s FHM article in PDF file, kindly email me via junsanchez2003(at)yahoo.com. It is a very well researched article citing some of the industry’s biggest players.

Thank you so much and my best regards to all.

Jun Sanchez
T +632 857.0100 local 1391
M +632 915.965.1389, 929.609.7142, 932.912.9585
Licensed Real Estate Broker
PRC Registration Number 4562

Living in a condominium is not for everyone. Condominium living is fit for those people who value time and convenience the most. Problem is, not all condominium projects enable their residents to save time nor do they offer much in terms of convenience. Thus, careful assessment of a condominium project’s offerings and features is essential if you are to make the most of your investment in a condominium.

Enter Grass Residences

Grass Residences is a development of SM Development Corporation or simply, SMDC. It is located just north of the envisioned Masterplanned Quezon City Central Business District called the Triangle Park.

Please read very carefully the article above about the Triangle Park… it’s a must read!!

…The development sprawls over more than 250 hectares, in a strategic location right in the heart of Metro Manila. It covers properties within the North and East Triangles and the Veterans Memorial area… which have been chosen to become a model, mixed-use development that shall play a critical role not only in Metro Manila, but also internationally.

The Triangle Park, has one of the most ideal locations, in terms of metropolitan access, with the use of at least 3 mass transit stations, and with a frontage on the main thoroughfare in Metro Manila that is longer than any of the existing major Central Business Districts…

It is described by the World Bank as the “center of gravity of all commercial activities in the coming years.”

Project Location Plan

Grass Residences sits just behind SM City North EDSA and is just a stone’s throw away from TriNoMa (which by the way, stands for Triangle North of Manila). It is bounded on the west by Nueva Ecija, on the north by Nueva Vizcaya and on the east by Misamis Streets. The project has three entry points for the residents’ vehicles, one along each of these streets.

Accessibility

SMDC understands the importance to its investors of being at, near or within easy reach of places that are most important to them: workplaces, schools, leisure areas, places of worship, medical facilities and the like.

• It is the best example of the so-called “transit-oriented” residential development. The bus, taxi, FX and jeepney terminals at SM City North EDSA, currently, are complemented by the EDSA MRT 3 for those travelling to and from south-east of Grass Residences.
• The so-called “Closing the Loop” project of the Department of Transportation and Communication (or DOTC) will link MRT3 with LRT 1. This will enable residents of Grass to reach more places faster, affordably and conveniently.
• Add to this the proposed MRT7 or the Manila Red Line that has been awarded to conglomerate San Miguel Corporation. MRT7 will have a 22-kilometer light rail line that will be linked to the MRT3-LRT1 common station at the corner of EDSA and North Avenue and will extend all the way to San Jose, del Monte, Bulacan… all using a single ticketing system. The single ticketing system will eventually include the Philippine National Railways.
• Grass Residences’ proximity to Mindanao Avenue gives its residents faster and easy access when travelling north via the North Luzon Expressway. The so-called NLEx Segment 8.1 or the NLEx Mindanao Avenue Link is a four-lane, 2.7 kilometer expressway that runs from Mindanao Avenue to the NLEx exit in Valenzuela City. Residents of Grass Residences can now bypass the EDSA-Balintawak route when entering NLEx.

Project Overview

Grass Residences is situated on a 3.6 hectare property. It has three modern-themed residential towers with ground level shared amenities and two parking buildings, each with a commercial component at the ground level. It has a total of 5,997 units composed of a mix of 1, 2 and 3-bedroom units.

Masterplan

Approximately 65% of total land area is allotted to amenities and open spaces.
Tower 1:  39 residential floors (1,988 units); unfurnished; 2 basement parking floors (94 slots)
Tower 2: 38 residential floors (2,022 units); fully-furnished; 2 basement parking floors (88 slots)
Tower 3: 38 residential floors (1,987 units); fully-furnished; 2 basement parking floors (84 slots)
Parking Building A: 4 parking flrs (201 slots); w/ commercial area; amenity rooftop (badminton courts)
Parking Building B: 4 parking flrs (218 slots); w/ commercial area; amenity rooftop (basketball court)
On-site parking: 202 slots

Sequence of Construction

Tower 1, Tifton – 2007; turnover Q3 2011
Tower 3, Bermuda – 2009; turnover Q2 2013
Tower 2, Bahia – November 2010; turnover Q2 2014

Why were the towers constructed in such a sequence? Was it a random decision on the part of management or is there an underlying reason for such? Why construct in sequence 1-3-2 instead of 1-2-3 or 3-2-1?

For Feng Shui reason; 1-3-2 is a lucky numerology in Chinese geomancy. Do you know Mall 168 in Tutuban in the area of Divisoria? 168 is the luckiest numerology in Chinese geomancy!!

Project Unit Mix

Mostly 1-bedroom units are offered in response to market clamor for smaller units and per historical sales of Tower 1.

But does the 6.6% share of the 2-bedroom units in the total mix suggest that there is not much demand for them? The answer is no; there is considerable demand for 2 bedroom units at Grass Residences.

Investment implication of offering mostly 1-bedroom units

Average pricing of 1-bedroom units in the three towers range between Php2.3 and Php2.7 million; whereas, for two-bedroom units, it’s between Php4.6 and Php5.5 million.

As per the old BIR ruling on E-VAT payment on real estate transactions, buyers of houses and lots (condominiums fall under this category) had to pay 12% E-VAT on condo units that are priced at P2.5 million and above.

BIR Revenue Regulation 16-2011 (PDF file), which took effect on January 1, 2012, increases the threshold amount for VAT-exempt real estate transactions for houses and lots to P3,199,200.

With either tax ruling, buying two-bedroom units is impractical as buyers will have to pay an additional Php552,000 to Php660,000 E-VAT.

So, how can someone own a two bedroom unit at Grass Residences and avoid paying the 12% E-VAT without breaking the law?

He can buy two adjoining 1-bedroom units and “combine” them into a single unit. That way, he shall be issued 1 Condominium Certificate of Title (CCT) for each unit or 2 CCT’s for the combined units thereby exempting both units from the 12% E-VAT.

There are several variations of combined units at Grass Residences. The picture on the right is a typical variant. Notice that the middle vertical portion is where the partition wall of the 2 separate 1-bedroom units is supposed to be.

Furnishings for units at Tower 2 and 3

Construction Update

Pictures speak louder than words. So, here are images showing the construction status at Grass Residences.

The Clubhouse or Pavillon took design inspiration from the architectural style of the casinos in Macau.

The main swimming pool is 50 meters long and is, therefore, considered as an Olympic-sized swimming pool, albeit with half the number of official lanes of eight; the pool has four lanes.

By the way, one of the most convenient features at Grass Residences is the private bridgeway or footbridge that links the project directly to SM City North EDSA. Residents can walk to and from SM, rain or shine, without their feet touching the road.

It will be guarded 24/7 and only Grass residents will have access to it.

Availability

As I write this post, there were 56 units still available for sale at Tower 1, 102 units at Tower 2 and Tower 3 appears to have been totally sold out (might be a database error, though; will check it again soon).

If you want to know more about Grass Residences, kindly give me a shoutout via the Contact Form above or you may contact me on my numbers below.

Thank you so much.

Jun Sanchez
Licensed Real Estate Broker
PRC Registration 4562
Tel 857.0100 local 1391
Globe 0915.965.1389
Smart 0929.609.7142
Sun 0932.912.9585

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

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

Fortunately, many real estate developers have caught on and have seen the importance of building projects that are sustainable. Thus, their emphasis on green building designs and construction.

In spite of these, though, there is one important environmental issue that no local developer has yet to address.

I would like to see the day when developers include among their amenities the provision of tap water that is so clean that one can drink it straight from the faucet, thereby eliminating, or at least reduce, the need for individuals or households to buy bottled water.

Bottled water not only burns a hole in your pocket, they’re one of the most environmentally-damaging commodities that we have become so used to.

The price of tap water versus the price of bottled water

I calculated the cost of tap water (we’re being served by Maynilad or the MWSI). The minimum monthly payment is 106 pesos for 10 cubic meters (cbm) of water.

1 cbm = 1,000 liters
10 cbm’s x 1,000 liters = 10,000 liters
Therefore, 106 pesos / 10,000 liters = 0.0106 peso per liter

A well-known brand of bottled water costs 65 pesos per 6 liter bottle or 10.83 pesos per liter (note that the smaller the bottle, the pricier the water becomes).

Ergo, bottled water is at least more than 1,000 times more expensive than tap water.

The environmental cost of bottled water

According to a 2007 report of the Worldwatch Institute, a US-based environmental research organization, massive production of bottled water results to excessive withdrawal of natural mineral or spring water thereby threatening local streams and ground water.

Equally disturbing is the environmental impact resulting from the production of PET (polyethylene terephthalate) plastic to make the water bottles.

• Being plastic, PET’s are petroleum-derived materials that worsen the already dwindling supply of non-renewable fossil fuel.

• “Producing one kilogram of virgin resin PET requires 17.5 kilograms of water and results in air emission of 40 grams of hydrocarbons, 25 grams of sulfur oxides, 18 grams of carbon monoxide, 20 grams of nitrogen oxides, and 2.3 kilograms of carbon dioxide.” That’s just for the production of the raw material, not the bottles themselves.

• According to the same report, this means that… “in terms of water use alone, much more is consumed in making the bottles than will ever go into them.”

• Bottled water is also distributed in a very inefficient manner. From the factory, they are delivered by trucks to their various destinations. Even neighborhood water refilling stations deliver water to their costumers mostly using tricyles thereby increasing fossil fuel consumption and carbon monoxide emissions.

• I don’t have to delve into the amount of plastic waste resulting from our consumption of bottled water, we already know that.

The health hazard of PET bottles

PET bottles are meant for single use and should never be reused for an extended period of time. If used repeatedly they, can leach carcinogens to the water. The chance of this happening increases if the PET bottle is placed in a refrigerator’s freezer.

What real estate developers can do

Consumers in industrial countries choose to drink bottled water for convenience, while in developing countries like the Philippines, unreliable and unsafe municipal or city water supplies have driven the growth in consumption of bottled water. And here’s where real estate developers can help a lot if they are sincere in practicing green development.

Here are some examples

Let’s take for example the approximately 240-hectare Bonifacio Global City in Taguig.

There, utilities like electricity and even liquefied petroleum gas (LPG) are distributed through an underground system. Large water reservoirs assure strong water pressure 24 hours a day, 7 days a week. Given these amenities and the owners’ (Ayala Land, Inc, Evergreen Holdings of the Campos Group and the Bases Conversion Development Authority) concern to protect the value and attractiveness of this township, can’t they come up with a system that will provide safe and clean drinking water straight from the faucet for all the office, commercial and residential developments there?

Is it too costly or too difficult to install drinking fountains in these establishments considering the alternative? By the way, I very seldom see drinking fountains nowadays. I think the bottled water industry killed them off.

Another example is Ayala Land’s Nuvali in Laguna. I honestly think that Ayala Land has outdone itself in making this project truly sustainable. Their system to conserve, recycle and reuse water is admirable. But there is no mention in their master plan about safe and clean drinking water from the tap.

The willingness to deliver clean drinking water should not be limited to developers of large projects like Bonifacio Global City and Nuvali. Even condominium developers can pursue this idea.

If they can boast of several modern and even futuristic amenities that cost several millions of pesos to construct, can’t they at least provide their unit buyers access to one of man’s most basic needs and help ensure a more healthy and sustainable environment at the same time?

Just thinking out loud; what do you think?

Thank you so much

image from www.waterfiltrationblog.com

What started as a mere curiosity to list down the many condominiums that I see being advertised everyday in the newspapers turned into a full-blown project – a directory of condominium projects all over Metro Manila.

What I originally thought would take days to finish, has now taken over a month of my free time. Whenever I thought I was almost done, more would come up.

But they are sprouting like mushrooms for a reason – there is great demand for them. I have this impression that condominium development may be the real growth engine of the Philippine real estate market.

Do note that this directory is still under construction and not yet online. I have simply put the directory’s banner on the header just so you and I can experience the look and feel of how this directory will eventually work.

I hope my directory will somehow enable those who are looking for a condo, either to own or to rent, to gain useful information and to save time before they actually go out to look for one.

It’s going to be a very simple directory. The name of the project is linked to its website. Only the most basic details will be provided – the developer, number of towers, number of floors and whenever possible, the number of units. The address will provide a link to the Wikimapia map of the project so you can examine the various points of interest within and outside its vicinity.

Here’s an example:

Avida Towers Global City is a two-tower condominium development of Avida Land Corp., a subsidiary of Ayala Land, Inc. It sits on a 4,000 square meter lot bounded by 9th, 39th and 10th Streets and Triangle Drive. Tower 1 will be 18 stories tall and will have 224 units while Tower 2 will be 20 stories tall and will have 256 units.

Please read this to see how you can take full advantage of Wikimapia.

For your information, the directory has so far included close to 200 condominium brands (many brands come in 2 to 3 towers; others come in clusters of 8 to 10 buildings).

The condominiums are classified according to their location. Although, not really a city, I have created a separate directory for Bonifacio Global City because it is densest in terms of number of condo development of very high quality .

Again, the directory is not yet online. I hope to put the Bonifacio Global City condo directory online within a day or two. So do watch out for it. The others will follow.

Thank you so much.

I’m completing a directory of the many condominiums in Metro Manila like the Products and Services Directory that I currently have.

What made me decide to come up with this directory is their sheer number – condominiums are sprouting like mushrooms. With so many projects to choose from, I hope this online directory can somehow ease the decision making process of those on the lookout for a condominium, either to own or to rent, before they even go out to actually look for one. The directory will include a link to the satellite map of each condominium project so prospective buyers or renters can examine online the institutional, commercial, office establishments and other special points of interest within its vicinity.

There’s a long way to go before I can complete this directory, but so far, I have counted 189 “condominium brands.” I said brands because 1 condominium doesn’t necessarily mean 1 building. Many brands usually come in two or three towers, and still some come in clusters like the Azure Urban Resort Residences (next to SM Bicutan) that will have nine buildings, each at 20 stories tall.

[See the location of the soon-to-rise Azure. To see the street names, place your cursor on “Map Type” in the navigation bar above and click “Google Hybrid” in the drop-down list]

There are interesting facts I learned while making this directory.

Major players in condominium development

It appears that Megaworld Corporation is the most aggressive developer of condominiums. Among others, it owns Eastwood City along C-5 Road in Libis, Quezon City. It is host to at least 12 luxury residential condominium towers and at least 5 more and 1 hotel are coming up. Megaworld managed to squeeze these plus several commercial and office buildings in a 17-hectare property.

To get an idea how relatively small Eastwood City is, Trinoma Mall, including its open spaces, along EDSA, sits on a 20-hectare property, while SM north EDSA nearby, occupies an area of 16.5 hectares.

Megaworld is also an aggressive player in Bonifacio Global City and in Araneta Center Cubao.

Talking about aggressiveness, Mr. Lucio Tan’s Eton Properties Philippines, Inc., a mere 3-year old company, has started 30 major major projects. Its projects, though, are a mixture of vertical and horizontal developments for residential, commercial and office use.

Ayala Land, Inc. which controls Bonifacio Global City together with the Bases Conversion Development Authority and Evergreen Holdings, Inc. of the Campos Group (of Unilab fame), continues with its strategy of opting for quality over quantity. In my opinion, its Serendra project is the best in the area.

Condominium developers rarely give out the number of units in their projects

Whenever I visit the official website of a certain condominium development, the number of units are often not disclosed, even if just an approximation. Features, amenities and other details are readily made available, but most of the time, I would have to dig deeper, even going to other websites, to find out the number of units. I can only guess that this is meant to downplay the disadvantages of living in a condominium where each unit owner shares the building/s with hundreds, sometimes, thousands of other people.

The condominium boom appears to be demand-driven

Unlike the real estate boom in the early to mid 1990’s which was speculation-driven, the current real estate boom appears to be demand-drive. There appears to be real demand for condominiums… so far. Many are selling like hotcakes.

This has been made possible largely in part by the easy and flexible payment terms offered by many developers. It’s now common for developers to ask for 20 to 30% down payment payable in 2 years. Others even offer full payment payable in 4 years at zero interest.

These payment terms were unheard of in the 1990’s when full down payment was customary to be paid within 30 days upon reservation.

Is there a condominium bubble that’s waiting to burst?

With so many condominiums that have been built, are being built and about to be built in Metro Manila and with many new players joining the fray, I sometimes wonder when it will ever stop. It’s a universal law that whatever comes up will eventually come down.

I am a subscriber to the newsletter of a leading real estate developer. I remember last year when it called on other developers not to start new condominium development because of what it perceived to be an oversupply of condominiums. It even encouraged them not to finish projects that year in order that earlier condominium projects be sold out first. Obviously, no one listened.

Let’s just hope that these developers will be prudent enough to recognize when enough is enough.

Thank you so much

I concluded by saying that just because there are several serious downsides to owning a condominium doesn’t necessarily mean that you shouldn’t buy or live in one.

In my two maiden posts here and here, I said that there are three basic types of housing – the traditional single-detached house, attached housing like duplex, quadruplex or townhouses and the condominium unit.

In those posts, I mentioned that it is important for a prospective home buyer to assess the basic values or benefits – time, convenience, space, privacy, space and/or peace and quiet – that are most important to him when deciding on the type of house he wants… because there is no one type of housing that can provide all those values to him.

So, what are the values that a condominium can offer at an extent that the two other types of housing cannot?

Time and Convenience

Investing in a condominium may seem like buying into a money pit, but by taking advantage of the time you save and the conveniences you gain by living in a “carefully chosen” condominium, these can result to massive savings that can more than offset the cost and expenses of living in one.

This can be best explained by giving an actual example of people who have opted to live in a condominium.

I have a cousin whose family of three used to live in a single-detached house in BF Homes, Las Pinas City. My cousin is a stay-at-home mom while their little daughter attended pre-school that daily required the service of a school bus. Her husband, a lawyer, used to drive daily to work at the Philippine Overseas Employment Administration along EDSA corner Ortigas Ave. in Mandaluyong City. That was at least an hour drive, one way, on a good day.

Today, they live in Cityland Mega Plaza just behind Robinsons Galleria; only spitting distance from the husband’s office.

Their daughter, who’s now in grade school, is enrolled at St. Pedro Poveda. Being devout Roman Catholic, they attend regular mass at EDSA Shrine. Need I say more about the convenience of living just across Robinsons Galleria?

They have sold their car realizing that they have no more need for it; they have everything they need near where they live. Whenever they need to go far, they take advantage of the MRT.

They have done the math and are certain that whatever money that goes out of their pockets for choosing to live in a condominium will be more than offset by the considerable daily savings they gain by simply walking to the places that are most important to them.

Aside from the monetary benefits, consider also the improvement on the family’s lifestyle.

The husband walks home from the office every day at 12:00 noon to eat lunch with his wife. Cutting on the husband’s travel time by at least two hours daily means precious hours that can be spent either relaxing or spending more time with the family.

It is by carefully choosing the “location” of a condominium, its amenities, the conveniences nearby and factoring and considering if such elements will give you the savings and the lifestyle you want that living in a condominium is highly justified.

Like I said in the past, choosing the type of house you like is not simply a financial decision; it’s also a lifestyle decision.

Thank you so much.

In the Philippines, a condominium building is any vertical development, ranging from, say, 5 to 50-stories tall comprising of, say, a hundred to 500 individually-owned units per building wherein the units share walls.

In the United States, condominiums also usually share walls, although, that is not always the case. There, many condominiums resemble what may appear to us here in the Philippines like townhouses, row houses or apartment complexes that may be only 1 to 2 stories tall. The similarity is in the extent of ownership.

Extent of ownership in a  condominium project

What makes a condominium project unique is not the number of stories they have or whether the units share walls or not. What makes it unique is that each home buyer owns his unit space but shares ownership and use of the common areas and there is no individual ownership of a plot of land. The entire land on which the condominium project stands is owned in common by all the homeowners.

Condominiums are set up like a corporation

Though, it’s not required by law for a condominium project to be set up as a corporation, the fact that all local condominium developers also target foreign buyers makes this necessary. Foreigners cannot own or co-own land in the Philippines; they can only buy into a corporation that owns land.

This, to me, is the most important thing to consider when buying a condominium unit. As a unit owner, you become a shareholder of the condominium corporation. One unit is equal to one share (that is proportionate to the size and price of your unit) in the corporation which is then equal to a proportionate vote.

If there are 500 individually-owned units in the condominium you are buying into, it means there are 499 other incorporators, with varying motivations and idiosyncrasies, who have more or less the same stake and voting power as you do. Everyone, through the condominium corporation, owns all the common areas in the condominium and the land on which the building stands.

Like in any corporation, certain issues and problems will arise that can only be decided through votes by the shareholders or unit owners. As such, some unit owners will lose and some will win. Later, I shall discuss the most important issue that condominium owners will inevitably decide on.

Condominium unit owners can only obtain a CCT and not a TCT

Ownership of a condominium unit is evidenced by a CCT or Condominium Certificate of Title. Unlike a TCT or Transfer Certificate of Title which is evidence of ownership of a traditional house and gives the homeowner absolute ownership of the “inside” and “outside” of his house up to the boundaries of his lot, a CCT only endows the condo buyer ownership of the “inside” of his unit. By the way, a townhouse owner is also issued a TCT that entitles him ownership of his unit and the land on which his unit stands.

Condominiums have a life span of 50 years

Although, the law does not explicitly say that condominiums have a life span of 50 years, it definitely implies so. Section 8c of The Condominium Act says:

That project has been in existence in excess of 50 years; that it is obsolete and uneconomical, and that condominium owners holding in aggregate more than 50 percent interest in the common areas are opposed to repair or restoration or remodeling or modernizing of the project…

In such case, the owners can vote to have the building demolished which presents them two options:

• Sell the land and the scrap from the demolished building, deduct the cost of demolition and divide the net proceeds among the owners, or

• Strike a deal with the original developer or another developer to build a new condominium on their land. But until such time that the new project is completed, the owners will have to live in a temporary home which may take 2 to 4 years.

You might be laughing at this point telling yourself: “I’ll be dead by the time my condo reaches 50 years old.”

This leads us to another point:

A condominium is not an ideal inheritance for your children or grandchildren

By the time you pass on your condo to your heir, it may no longer be ideal for dwelling. If you ask me, 50 years is too long given the propensity of many developers to build very tall condominiums. The taller a building is, the more prone it is to the ravages of time and harsh environmental conditions, ergo, the shorter its life span. They are also the most technologically-dependent type of housing.

Short of 10 years, 40 years from now, will future buildings be using the same electrical, water or cooling systems that buildings are employing today? Will replacing these systems, even just their cables, pipes and conduits (which are mostly embedded in the walls) in a, say, 30-story condominium, be feasible? How will you replace a totally broken down elevator in such a building? Will the elevators that we have now still be the same mode for transporting residents up and down a building?

At the very least, modern condominiums today will become eyesores 50 years from now; they will be drowned out by future architectural designs.

Association dues is not the only expense that you will have to pay

Payment of association dues is not unique to condominiums since owners of single-detached houses in subdivisions and owners of townhouses also pay association dues for the maintenance of common areas, solid waste management, security and more. But association dues in condominiums are highest per square meter.

The following are the other expenses that you shall pay when living in a condominium:

• Realty tax on your unit

• Share of realty tax on the land on which the condominium stands

• Share of realty tax on common areas

If you have a car and you opt to buy a car slot in the condominium, expect to pay an extra half a million pesos or more and pay additional monthly dues for it.

Given these 6 things to consider before buying a condominium unit, does it mean you shouldn’t buy a condo?

No, it does not; it depends on the lifestyle problems you want solved.

More on this on my next post.

Thank you so much

P.S. PDF file [The Condominium Act aka Republic Act No. 4726]