Wednesday, April 11, 2007 Osmeña: Cebu’s realty market By Antonio V. Osmeña Estatements
CEBU has always been a major population center, primarily due to its location astride the archipelago’s main trade routes.
Cebu lies in the very heart of the Visayas, surrounded on all sides by islands of varying sizes and importance, at the center of a truly insular region of the Philippine archipelago.
Situated along the middle of the east coast, Cebu City has profited greatly from this favorable location. It enjoys a well-protected port area and a modern international airport. It was and still is predominantly commerce that draws people to Cebu.
In recent years, Cebu has become a tourist destination and a jump-off point to neighboring islands. The important thing that has made Cebu an interesting area for investment is the different types of property traded.
The advantage of Cebu over the other islands within the Visayan archipelago, specifically in the real estate market, is in its specialized fields of operation which include residential, commercial, industrial, farm and special purpose properties.
These recognized specialized real estate development is a boom to buyers, speculators and developers since the land in Cebu is deem “ripe” for more intensive use.
Each of these specialized areas of the real estate market is further classified according to rights of ownership or use. Thus, it is in order to speak of a rental market involving transfer of space and an equity market involving transfer of real estate ownership.
Cebu is indeed lucky because it has contained the changes in the balance of economic, political and social forces that influence the supply and demand of real estate.
One of the most important concerns of the investors is taxation and land use controls. Taxation is one of the more important forces that influence the supply and demand for real estate. This force may be positive or negative in nature and is often used as a government tool to compel or deter real estate development or to direct employment of land for particular uses.
In many urban areas, particularly those of high population concentration, vacant land or lots with blighted structure should be assessed and taxed in excess of its contribution to over-all real estate market value in order to stimulate its use and thus, indirectly discourage the holding of vacant urban land for speculative purposes and encourage improvement of blighted structures.
Cebu definitely has some important influences that have been considered by investors in the analysis of the real estate market. The increasing population, migration of population and changes in family formation had created a demand in real estate transactions involving the transfer of space or ownership in residential realty.
The real estate market is also sensitive to changes in wage levels, employment opportunities and stability of income. Rental payments and housing costs are closely geared to ability to pay.
Cebu has a higher degree of entrepreneurs among its populace thus, creating more personal savings that allows them to avail themselves of mortgage funds with stable interest rates. This allows homes to be bought on credit.
The terms, therefore, are an important part of a purchase transaction and often influence the transaction price.
Rental activity, particularly in Metro Cebu and other urban areas, still forms an important part of the total real estate market.
The availability of land and the cost of land affect the supply side of the real estate market. Cebu’s land, which is economically usable, is now in short supply.
Many of Cebu’s coastal lands and most of its mountain hinterlands do not have improvements in the form of access roads, drainage facilities, water and other community utilities. Such improvements are costly and can be successfully carried out only by the government.
Cebu City is now undergoing changes in the arts and by building obsolescence. Thousand of structures in Cebu City’s prime areas were constructed 50 years ago. It’s time now to tear down these structures and introduce the advances in building design and methods of construction.
