'Buying Philippines Property – Download a free sample chapter!

The Philippines property market is positioned to generate the strongest property price increases over the next 10 year thanks to ongoing economic and administrative reforms by the Arroyo government. The ASEAN countries have yet to exhibit the price gains of Western markets, which is just another sign that this super cycle is far from over. The current credit crunch will provide a great opportunity to profit from property foreclosures.

Buying Philippines Property 2010 - Download the table of contents or buy this 2-volume eBook at our online store for just $US19.95.

Japan Foreclosed Property 2011 -2012 - Buy this 4th edition report!

Are you aware that you can buy a house & lot in Japan for as little as $10,000. Surprising but true! Japan is a large market, with a plethora of cheap properties up for auction by the courts. Few other Western nations offer such cheap property so close to major infrastructure. Japan is unique in this respect, and it offers such a different life experience, which also makes it special. Some property is in rural areas subject to depopulation, but there are plenty of properties in the cities too. I bought a dormitory 1hr from Tokyo for just $US30,000.
You can view foreclosed properties listed for as little as $US10,000 in Japan thanks to depopulation and a culture that is geared towards working for the state. I bought foreclosed properties in Japan and now I reveal all in our expanded 200-page report. The information you need to know, strategies to apply, where to get help, and the tools to use. We even help you avoid the tsunami and nuclear risks since I was a geologist/mining finance analyst in a past life. Check out the "feedback" in our blog for stories of success by customers of our previous reports.

Japan Foreclosed Property 2011 - 2012 eBook - $19.95
Download a copy of the table of contents.

Sunday, August 24, 2008

The Philippines - strongest property prospects in Asia

The Philippines is expected to make the strongest advances in property prices over the next decade (2008-18) based on current macroeconomic considerations. The Philippines has long been regarded as an economic laggard in Asia because of its crippling corruption and low regional competitiveness compared to the Asian upstarts China and Vietnam. Several years ago however the Arroyo administration brought home some poignant lessons in economic growth, and she has slowly made changes to implement them to good effect. President Arroyo is a trained economist herself. The question remains - will this trend be sustained? Based on the breadth of the reform - we think yes. We also think that despite having no chance of a 3rd term, Arroyo will be recognised over the next 2 years for her efforts. This will mean she will have considerable influence in determining the next party leader. The factors which are likely to lift the property market are:
1. Climate: The attractive climate provides a compelling reason for expat Filipinos and foreigners to live in the Philippines.
2. Filipinos lifestyle values make the Philippines a nice balance between business and recreation. Things move more slowly here and that appeals to a lot of people, particularly retirees.
3. The Western legal system provides people with the capacity to seek court resolutions to conflicts
4. Land title reform will give landowners confidence in the validity and security of their title in the first instance. Cross-jurisdictional administration should help reduce corruption. This will take some time, but this should not delay investors since half of the country's title is already based on the Torrens title system.
5. Strong population growth could mean a lot of new property buyers if the government is able to deliver on its reform agenda. The current rate of population growth is 2% per annum, the fastest rate in Asia.
6. English speaking environment makes the Philippines an easier place for Westerners to live and do business. Even for Koreans, Japanese and Chinese, who might have struggled with another language, they can rejoice in their English skills, as well as the large populations of Koreans and Chinese already living and doing business in the Philippines.
7. Structural adjustment of the Philippines economy and its system of administration is set to have a big impact. At this point there is little in the way of results, but gradually this factor alone could help to stamp out corruption. The core of the change is the Local Government Code of 1991. This law proves that some laws improve with age.
8. Regional proximity: The closeness of the Philippines to Asian countries is likely to lift the standing of the Philippines as a tourist destination, particularly if the growth of budget airlines continues from secondary airports. The Philippines is well positioned to benefit from a stronger Asian economy and higher rates of Asian tourism. Chinese are just starting to go abroad.
9. The low cost of living, including the ‘relatively’ low cost of property in the Philippines by global standards is a compelling reason for buying property in the Philippines.
10. End of land reform: This is speculation at this stage, but the Agrarian Land Reform Program (CARP) will likely be abandoned by Congress. Currently Congress cannot reach an agreement. CARP was implemented to give landless Filipinos greater equity or reward from their participation in the rural economy rural, after they had long been marginalised by land barons. The policy of land distribution was intended to lift food output, but its had the opposite impact. CARP has thwarted investment in both production capacity as well as farm acquisition. Higher food prices, termination of CARP, greater investment for higher yields and land zoning compliance should help to raise land demand, and thus land prices. Farm prices have hardly recovered from the drought-breaking rains after 30 years of restrained investment. One need only look at the poor land utilisation rates in the Philippines. ‘This country should be a rice basket, yet it cannot feed itself’.
11. Tighter property supply as a result of tighter controls on land rezoning by local government should increase land prices more than in the past. The devolution of public administration from national to local government units should result in higher incomes and stronger economic activity in provincial areas.
12. Generous tourist visa conditions mean that allow foreigners to reside in the country on an extended tourism visa for up to 18 months. Indonesia is far more strict.
13. Credit expansion: The third wave of a global credit expansion is set to propel Asian property and equity prices over the next decade. The gains will come slowly at first, but with asset deflation sparked by higher interest rates elsewhere its not too late to buy. The Philippines is destined to be one of the best performers.

One might well take comfort from the negatives in the Philippines because they can only get better.
14. Peace in Mindanao: Perhaps the greatest obstacle to development is the 30-year fight by the Muslims of Mindanao for independence. More moderate Muslims are negotiating an measure of autonomy with the national government, but recent negotiations have failed. It is still too early to say if the Philippines government will reach a peace accord with the Muslim free-fighters of the Muslim Islamic Liberation Front (MILF). Much of Mindanao and the Sulu Islands have been off-limits to development because of conflicts that have left this promising region as one of the poorest in the Philippines. There is the promise of extraordinary gains on property investment once these security threats are removed. But given the uncertainly, Davao looks like the safer investment option.
15. Port reforms are needed to improve the efficiency of the ports. This is a significant cost for importers and exporters alike. The cost of domestic shipping has fallen due to the development of RORO port facilities.
16. Corruption remains at a high level, and the President's family has been implicated in some corruption scandals.
17. Labour productivity is very poor in the Philippines. There are programs to address it, but they are not so significant at this point. Education standards over the last 20 years have declined.
18. Acquired assets: The Philippines has a high level of bad debts as a proportion of total loanable funds. This has been a significant drag on the local economy. A bout of inflation at the current time should actually help the banks liquidate these bad debts.

For these reasons I retain a positive opinion on the outlook for the Philippines economy, and the property market in particular. I actually did not recognise the significance of the trend until I started researching and analysing this market. The reform of local government in the Philippines is not publicised much. For more information see our latest report Buying Philippines Property. Download a copy of the first chapter here.
Andrew Sheldon www.sheldonthinks.com

Outlook for Asian property prices

Asian property markets are going to produce some of the best property price gains ever seen in the region. The strength of Chinese property markets is just a precursor to what is going to happen in other Asian property markets. The big increases in property prices that were experienced in the East Asia were largely confined to reformist, pro-market, pro-investment China and Thailand. There is every reason to believe that the Philippines and Indonesia will do particularly well over the next decade based on reformist agendas currently underway.

This conclusion is supported by the fact that the world is currently passing through one of those unique periods of time when productivity and industrial capacity are growing at very strong rates because of liberalisation of markets, credit expansion, as well as the ready flow of capital and information. In these formative stages the flow of information is not so good, but the efficiency of these flows will improve over time.
There is considerable concern about the state of credit markets. These issues will surely raise the cost of capital in the short term, but in fact they will spark reforms globally that will only improve the competitive forces pushing the cost of capital even lower. This is a long cycle, and whilst we are already seeing higher cost of capital, I think these pressures will subside. I don't see any unwinding of the global credit expansion, rather a shift to Asia and other developing countries. The Philippines is one of the most exciting property stories in Asia.
You might ask what does the current inflationary pressures mean? Well there has been inflation for some time now, that is over the last 5 years. This has not been significant by government measures because it does not include asset prices. People truly don't understand inflation. When asset prices come down 'cost of living' prices (inflation) must go up, or a lot of that credit has to be liquidated. No government has any interest in causing deflation, they merely want to stabilise prices, and the best way to do that is to bail out failing banks as they raise rates.
We can expect higher interest rates in Western countries, but this will only see hedge funds and other investors shift their focus to Asian nations. You might ask - How can this occur? The Asian markets are too undeveloped or immature to support such products. If these products are not supported in Asia, as I would expect, then the asset classes will be supported by offshore markets. Its also possible that more developed Asian markets like Singapore and Sydney might provide a basis for the development of property investment vehicles, not just for foreigners, but Asians as well. The focus of such products are likely to be tourism, commercial and residential developments. Just as the world was excited by the industrial expansion of China, watch over the next decade as Chinese people start to travel. Not just Chinese people, but increasingly Koreans, Thais, as well as Russians, Arabs and other peoples.
Andrew Sheldon www.sheldonthinks.com

'Buying NZ Property – Download the free sample readings!

The NZ property market is shaping up as one of the most attractive property investment markets for the next few years. High yielding property and the collapse of the NZD make NZ the perfect counter-cyclical investment if you buy right! In addition, there is no capital gains tax, transfer taxes, VAT/GST or wealth taxes in NZ, so rest assured that NZ property is tax-effective! Learn more now!

New Zealand Property Report 2010 - Download the table of contents or buy this 180-page report at our online store for just $US19.95.