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Monday, March 17, 2003
Tesoro: Brokering growth in real estate business
By Mary Jane Tesoro
BEHIND the abundance and adroitness of real estate properties in the country, is a plethora of idle and on-performing assets long waiting to be mobilized and converted into revenue and employment generating industries.
Since the massive fallback of real estate business following the 1997 global financial crisis, the real estate sector has yet to shake off its drowsiness.
Huge establishments stand towering yet hardly occupied, if not vacated in favor of rats and cockroaches because of past due loans and foreclosures. Banks and other government financial institutions have also suffered from the collapse of real estate business and are now scratching their heads for strategies to convert into cash and plow back into business their long inventory of foreclosed properties.
Yet, real estate properties are vital assets for the conduct of business, especially for SMEs. A sizeable portion of assets in most small and medium enterprises consist either of land or structures which will house the operation of business activities. There is, therefore, a need to promote industrial, commercial, and even residential assets for prospective locators in the region. This is a huge backlog that needs to be addressed to benefit both consumers and realtors.
Seeking to bridge along this backlog, the Department of Trade and Industry (DTI) XI will formally open today a weeklong "Property Fair" to bring together key players in the supply and demand sides of real estate business with the end view of priming once more the real estate business in the region.
The Property Fair seeks consumer options for housing needs and other real estate requirements and to gather feedback from organized consumers for future advocacy to improve housing and real estate policies. A property forum will cap the weeklong fair, which will be held on March 21 at the Royal Mandaya Hotel to square on policy issues related to real estate industry.
According to the DTI XI, the event, which will run until 23 March 2003, will showcase the different real properties and housing opportunities available in the region. Real estate brokers, subdivision developers, financial institutions and bankers association will be participating the event to forge linkage between and among real estate practitioners, investors and other industry key issues.
We commend the cooperators of this laudable and timely event, which include the Subdivision Housing Developers' Association, Development Bank of the Philippines, Land Bank of the Philippines, Davao Board of Realtors, Banko
Sentral ng Pilipinas, SSS, GSIS, HUDCC/NHA, HDMF, Commercial Bankers' Association of Davao City, and the Davao City Chamber of Commerce and Industry, Inc. (DCCCII).
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Parallel to the issues and concerns of the real estate industry, we have had a chance to get the opinion of the leading organization of realtors in the city on the status of real estate business. Past President of the Davao Board of realtors Foundation Inc. Leah Theresa Jovero explained to us the real score of the industry from the point of view of the realtors.
As an active stakeholder on the real estate business, Jovero frowned at the relatively sluggish growth of the industry and expressed her misgivings on the implementation of the new zonal values, which she feared would only aggravate the suffering of the sector.
She said the only "in thing" in the real estate business nowadays "is characterized by the buy and sell of residential lots / house and lot packages from the secondary market or from housing developers". Buyers, she said are generally expats, OCW's or OFW's who have the dollars to spend for the properties. "If there were any movement in the commercial/industrial or agricultural inventories, the sales were quite insignificant. There may be inquiries for other land uses, but they tend to remain up to that level only", she added.
As if rubbing salt to injury, the implementation of the revised schedule of zonal values was meted with skepticism and trepidation from the realtors, fearing the new policy would only wire them further to the doldrums. The new zonal values which was implemented by the Bureau of Internal Revenue last December 28, 2002 pegged the prices of real estate at a much higher price than the 1996 schedule of values. A case in point is that of Woodridge Park.
Jovero cited that the zonal value of WRP, under the new policy, is priced at P 4,000.00 per square meter while WRP owners are selling their lots at P 300.00 - P 3,800.00 per square meter. "If a sale of this kind pushes through, the tax due with the Bureau of Internal Revenue will be based on which ever has the highest consideration; in this case the P 4,000 per square meter regardless, of the fact that the property was only sold at a much lower price," Jovero lamented.
On the other hand, to follow the prescribe schedules despite the lethargy of the industry is feared would only further diminish the interest of property locators to put in investments. Jovero said, "If we tie up the slow activity of the market to the newly implemented schedule of zonal values, we will have an industry moving at a turtle pace.
This goes to show that instead of encouraging market activity, the government is dampening
the enthusiasm of buyers in investing".
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If the there are bad things happening in the industry, it is also worthwhile to note that there are good things undertaken parallel to them in an effort to cushion their impact to the stakeholders and to raise their morale to continue doing business. We have cited earlier the opening of the property fair, and we would like to add here also the highly commendable advocacy of the Davao Board of Realtors in priming the real estate industry.
Last Friday, the board successfully organized the forum on Global Trends in Architecture and Urban Planning, with globally renowned Filipino architect Felino Palafox Jr. as the guest speaker. The message that Palafox imparted to the participants was very timely and encouraging in light of the current condition of real estate business.
He encouraged architects and realtors to see the positive side of the present condition of the industry, drawing lessons from his experience in Dubai as the developer of its urban development master plan. He said that despite the unlikely condition in the Middle East region, optimism and determination enabled urban developers to maximize every opportunity in the society to provide practical ways of living for the people and in laying down the road map of growth for the communities.
The message of Palafox came as a tickler for the real estate stakeholders in the city. In the face of the trudging growth and development of the industry, there are plenty of things that can be done that will benefit both the industry and the community.
This however, requires strengthening the unity of the sector and winning the active participation of each stakeholder in an effort to complement the modern outlook and necessities of urban dwelling. History tells us that community best practices emanate from the difficulties encountered in the community and from the determination of its people to steer growth and development out of them. (Mary Jane Mateo-Tesoro is vice president for industry of the Davao City Chamber of Commerce and Industry, Inc. She welcomes comments and suggestions at dvochamber@skyinet.net.)
(March 17, 2003 issue)
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