Philippines attractive to Europeans

A gentleman the other bought my report from Spain. It was my first customer from Spain, so I was surprised; however I quickly made a connection with the current banking and currency crisis in Europe. I am aware that wealthy Greeks, Portuguese and Spanish investors are pulling their money out of Euro. This is understandable given the possibility of these countries being ejected from the EU. I actually think this is a desirable occurrence. These 3 countries and a number of Eastern European countries would be better served by their own currency.
I can nevertheless see the interest of this particular customer in the Philippines because of the historical Spanish influence in the Philippines, the similar values, the property fundamentals, the economic fundamentals. The Euro is not faring great against the peso, but even still the trading band is relatively narrow, so no great loss in making transfers now. Over the last 5 years the Euro has traded between PHP60-70, so not much variation.
The Philippines is some of the best exposure you will get to Asia. Its about as Western exposure as you can get to Asia without paying a premium for the currency; as you will do buying property or other asset classes in Australia, Canada or NZ.

NZ Property Guide
Philippine Real Estate Guide
Foreclosed Japan Guide

Philippines property report - reform minded economy

We have just finished our latest report - the 2nd edition of the Philippines Property report. This report is updates the 1st edition, which was already a very comprehensive 2 volume report. The latest report is 345 pages. Some people would prefer a shorter report, however everyone has different knowledge on each country we look at, so we attempt to consider all pertinent material. For those wanting specific information, there is a detailed table of contents included, which can be downloaded from this site.

Some of the pertinent facts which might interest readers is the opportunity for people to buy rural banks in the Philippines. For those of you with a reasonable about of money, a micro-finance business might appeal to you; particularly as you could play a part in the improving standards of micro-finance or banking in the Philippines. These banks have higher rates of non-performing (foreclosures) loans than the main banks. Some rural banking reforms are currently under consideration including foreign investment (up to 40%) and the ability to offer insurance products.

Another big development in the Philippines is the growth of tourism. The Bicol area has recorded a 163% increase in domestic tourism in the first nine months to Sept 2009, including an increase of over 20% in foreign tourists. The Dept of Tourism has been spending a lot of money on tourism. I have noted the difference on my last tour around the Bicol region and Mountain Province. The Bohol area is another popular place, both for local and international tourists. This is of course important for resort developers. Resort developers are looking further afield than places like Boracay and Cebu, which appeal mostly to the Koreans and Chinese.

Property yields in the Philippines are still pretty reasonable at 9%. I would expect these to rise again from the middle of the year as a result of inflation; though I suggest they will rise in lock-step with higher property prices. Buyers are still interested in the residential market, with the commercial market taking the brunt of the recessional doldrums. The fact remains that remittances to the Philippines are strong, Business Process Outsourcing (BPO) is strong, tourism is up 16% and commodity prices are strong as well. By all measures, the Philippines is ready for business and investment.

We considered in the report the appeal of other markets. Thailand is one country which ranks highly, and others might consider property in Indonesia, which offers higher yields. However Indonesia has very tight visa conditions, and does not demonstrate the same level of fiscal reform. I have for the last 2 years been impressed by the progress of reform in the Philippines. More progress is needed in areas like productivity, reform of the ports, the efficiency and fairness of tax collection, reduction in corruption. Aside from corruption I can see some progress in these areas, but a lot more needs to be done. Thailand's yields are not as attractive at this point.

The improvement of infrastructure will mean a great deal for the country. A few years ago we bought some land in Lipa for P750, and already we are fielding interest at P2,000 per m2.

NZ Property Guide
Philippine Real Estate Guide
Foreclosed Japan Guide

Japan's political reform in doubt

The latest news from Japan suggests that the chances of reform under the current PM Yukio Hatoyama are quickly deteriorating. The Democratic Party of Japan lost a local election in Nagasaki. I consider that less important considering that their candidate was a bureaucrat, and he was beaten by the Vice Governor. The more important issue is opinion polls, which are being shaped by the financial scandals. They have a few months to turn those fears around, otherwise we are looking at a 'hung parliament', which is not the best basis for reform. See the full story here. Ideally I would like to see the DPJ given a majority in both houses in the June 2010 elections.

NZ Property Guide
Philippine Real Estate Guide
Foreclosed Japan Guide

Philippines property ranks highly on yields and forex rates

I'm in the process of updating my Philippines Property Report. This will be the 2nd edition. A part of this report is helping prospective retirees, investors and expats to find investment opportunities in the Philippines. We do this for our own benefit as well as yours. The focus of this blog is exchange rates. The Philippines peso has tended to suffer along with the USD, though it has generally fared better. Click on the charts to the left and it will be apparent that foreign or Filipino investors holding Australian dollars, Canadian dollars or US dollars are in a pretty good position to invest in the Philippines. The same is true for expatriates or Japanese people holding Yen. The Yen is also trading a favourable exchange rate to the Philippines. The attraction of investing in the Philippines is particularly attractive given the better than average yields - 2nd only to Indonesia in East Asia at 9% per annum according to Global Property Guide. Investing in the Philippines makes less sense for Europeans given the weaker Euro, but having said that, its far easier for foreigners to raise finance in the Philippines than other countries. Some people take out loans in their partners names. Its even easier if you are buying foreclosed assets because some of the banks will not require proof of income. The implication is that even Germans, French, Dutch and other investors can buy property in the Philippines with the expectation of paying off the loan when the currency is optimal.


NZ Property Guide
Philippine Real Estate Guide
Foreclosed Japan Guide

Buying foreclosed property in Guam

I don't offer any particular information about buying foreclosed property in Guam, but in the process of researching for my 2nd edition Philippines property report, I note that the PNB-Allied Bank of the Philippines have a listing of foreclosed property in two locations in Guam.
I thought this property might interest people because I've previously met an Australian military retiree who was moving to Guam to live with his Filipino girlfriend. He had been in the military for 10 or 20 years, thereafter apparently they get a lifetime pension. Seems like a good deal for someone who saw no military action. Anyway, for anyone interested the details are here. I have not been to Guam, but it might appeal to American servicemen as well. The idea of being stuck on an island might appeal to others. I don't imagine the flight connections are very good either.

NZ Property Guide
Philippine Real Estate Guide
Foreclosed Japan Guide

Cheap tickets NZ to Japan

Are you a New Zealander interested in investigating foreclosed properties in Japan? Well there has never been a better opportunity to fly to Japan. Air NZ is offering discounted tickets:
1. Two tickets from Auckland to Osaka - see TradeMe
2. Two tickets from Christchurch to Tokyo - see TradeMe

The bids on these tickets are currently around $420 for two tickets. You could be reading my book on the plane. :) Any option is a good deal. Have a look at the other flights on offer. Of course you have to depart from NZ.

NZ Property Guide
Philippine Real Estate Guide
Foreclosed Japan Guide

Best buying in Japanese foreclosed property

We have just released our Japan Foreclosed Property eBook (3rd edition). For those of you not aware, this is probably going to be the best 2 year period for buying foreclosed property. There are three compelling reasons:
1. The Japanese elections in mid-2010 could result in the Democratic Party of Japan holding a two house majority in which to make substantial reforms.
2. The Japanese public debt has reached a point (200% of GDP) at which it is going to struggle to raise money. It has been forced into a corner. Going to the international market would mean much higher interest rates. It has to reform and slash costs. The DPJ is waiting for that election. It needs a majority in both houses.
3. The high public sector debt essentially places a ceiling over Japanese interest rates for the next 5 years, if not longer.

The implication is that you are going to have low interest rates looking forward, and you are going to see reform which boosts real incomes. These rises in income will flow through to asset prices like property and equities. Want to know more about the Japanese foreclosed property market.... all is explained in the following Japan foreclosed property report. Why rent in Japan when high yields favour owning property. You can buy a house for as little as 1-3x your annual income.... if you buy in the suburbs like Sakado (less than 1 hour from Tokyo).

NZ Property Guide
Philippine Real Estate Guide
Foreclosed Japan Guide