Real estate prices as financial soundness indicators

Real estate has been a neglected area because it has always been treated as an independent sector. Now, the real estate sector is viewed as a significant contributor to the financial position of financial institutions in terms of mortgage loans as well as asset holdings. Thus, real estate prices are critical for the financial sector and in terms of measuring the wealth of the country. This is an area where information is lacking. In our country, there is no agency that collects real estate market prices.” This comment was received by the International Monetary Fund (IMF) in response to comments on the draft Compilation Guide on Financial Soundness Indicators (Guide) that was posted on the IMF’s public website in March 2003. It sums up succinctly a common view of real estate prices from both the user and compiler perspectives. The data are needed but are lacking.

What are financial soundness indicators?

Financial Soundness Indicators (FSIs) are indicators of the current financial health and soundness of the financial institutions in a country, and of their corporate and household counterparts. They include both aggregated individual institution data and indicators that are representative of the markets in which the financial institutions operate. FSIs are calculated and disseminated for the purpose of supporting national and international surveillance of financial systems. In short, the development of FSIs is a key tool in the IMF work to strengthen financial system stability.

This initiative was prompted by the financial market crises of the late 1990s and the growing observation of the number of banking crises that has occurred globally in the last two decades. As has been well reported in research by the IMF, BIS, and others, there are significant costs arising from these crises, both direct (such as the cost of recapitalising the deposit-takers) and indirect (such as the loss of real economic activity), and this has demonstrated a need to develop a body of  statistics that could support policymakers in identifying the strengths and vulnerabilities in their financial system and in taking action to prevent the likelihood of such crises occurring.

FSIs are only one part of the IMF’s work in the field of crisis prevention, and of course the IMF’s work itself is part of a larger international effort, including the Bank for International Settlements and others. Notably, FSIs are an input into the IMF-World Bank Financial System Assessment Program (FSAP). This programme is designed to identify financial system strengths and vulnerabilities and to help develop appropriate policy responses. More information on FSAPs, including the countries that have participated, is available at http://www.imf.org/external/np/fsap/fsap.asp.

Where do we stand with the FSI project?

The work began in 1999 with a conference of experts in the field of financial stability issues. That  conference was similar to this one on real estate, with private and public sector experts exploring key user and compiler issues. Taking forward the outcome of that meeting, and after undertaking wide consultation, in 2001 IMF staff presented the IMF Executive Board with a list of FSIs, which it endorsed. The list (attached) is divided between core indicators and encouraged indicators in order to help prioritise future work at the national level. All the core indicators - FSIs considered to be useful in all countries and generally available - relate to deposit-takers, which are institutions that are central in all financial systems. The encouraged FSIs include real estate prices and the extent of deposit takers’ exposures to residential and commercial real estate.

Where do real estate prices fit into FSIs?

From the very start of the work on FSIs at the conference for experts, it has been evident that for most economies monitoring real estate prices is important for financial stability analysis. Others will discuss this issue in more depth ahead so I will not dwell on the reasons why, but simply note that from the viewpoint of deposit-takers, and other sectors, there can be large exposures (both direct and indirect) to an asset whose price can be volatile not least because of the actions of lenders themselves. For this reason, residential and commercial real estate prices are included in the list of FSIs along with
deposit-takers’ lending on such real estate.

We expect that implementing the new Guide is likely to prove a medium-term rather than a short-term process. This is nowhere more true than in the field of real estate prices.

Types of questions raised

Finally, let me turn back to the author of the quote at the start of this presentation. The commentator went on to raise a number of possible technical issues that could be discussed. I leave them as examples of the types of questions that those who want to move forward with real estate prices are

asking:

1. “How do we deal with the large diversity in residential and non-residential buildings?
2. Another problem is the lack of an inventory of residential/non-residential buildings. How is this compiled?
3. How are prices for real estate assets collected? Can unit values be used instead of actual prices? Does market price refer only to current cost of construction and land or the selling price of the real estate unit?
4. How do we deal with conversions of agricultural land to commercial properties? Prices can increase significantly.”

I often hear stories about real estate deals that went bad, sellers who were charged very high commissions, buyers who were harassed by brokers for a commission, and realty practitioners who were not justly paid for an appropriate commission by the sellers or by their co-brokers.  Now as a realty practitioner how do you protect yourself and your clients from these unhealthy, and often fraudulent, practices? How do you avoid the frustrations of being tricked into a deal which was very promising in the beginning?  How do you gain acknowledgment as a professional in a business that you know you are good at and that is providing you high unlimited income?  The answer is simple—get a real estate salesman license.

The first thing that gets affected when you don’t have a license is your ability to market the properties.  You will be limited to your own means.  You cannot attend exhibits and other developers’ activities that give you the chance to meet prospects because at least a real estate salesman license is required. 

Whatever marketing strategy works best for you, a real estate salesman license will give you a more secure and wider coverage to market your business and thereby gives you a bigger chance of finding potential clients that will respect and acknowledge you as a professional in the business.  Marketing strategies and real estate laws in the Philippines is changing and so should you.  Along with these changes come new rules and regulations set by the authorities which you have to abide by and follow in order to remain successful in this business. 

A real estate licensed salesman, specifically of Land Asia, gets the benefit of being well-informed about his rights and responsibilities in relation to the government, to the public, to the client, to his fellow practitioner, and to his organization, because we are a company that highly supports continuing education of these licensed salesmen.  Securing a license doesn’t end once you get your license card; in fact, it is only the beginning of your education as a professional realty service practitioner. 

Like all other professions, you are bound to a National Code of Ethics for the Realty Service Practice.  A Land Asia real estate licensed salesman doesn’t have an excuse to ignorance of these laws and ethics because we make sure that you are well-educated, updated, and well-informed of new regulations that affect your realty service practice.  We promote highly competitive real estate licensed salesman who knows what he is doing wherever you put him in the globe.

Remember that you are no ordinary person when you are in real estate.  You must be trustworthy—your client’s lifetime investment is in your hands, you must have the skill to negotiate, you must be analytical, you must be patient and persistent. 

As a true-blue Realtor, I encourage my colleagues to get a license to protect them from unfair competition. As a citizen becoming a professional in a field that you love, that you are very good at, a genuine license is also a way of empowering yourself, building high self-esteem, and boosting your self-confidence.  

The qualifications of an applicant for the real estate salesman license are the following:

1.    He is at least 21 years old;

2.    He is honest, truthful and of good moral character;

3.    He has not been convicted of any offense involving moral turpitude. As proof, he shall submit to the Director his clearance either from the Clerk of City or Municipal Court or Regional Trial Court of the locality where he has resided or held office, for at least one year immediately prior to the date of application or from the National Bureau of Investigation.

IN THE CASE OF SALESMAN, HE SHALL SUBMIT A RECOMMENDATION OF THE EMPLOYER BROKER INSTEAD OF THE AFORESAID CLEARANCE.

4.    An applicant for a license as salesman must have satisfactorily completed at least HIGH SCHOOL COURSE OR ITS EQUIVALENT WITHOUT TAKING QUALIFYING EXAMINATION.

Source: Article V, Section 4 of Ministry Order 39

Land Asia with its effort to support its members obtain their real estate salesman license will assist in the processing of the license at no cost at all.  As a Land Asia member all you have to do is to comply the following requirements set by DTI:

1.    Original copy of NBI clearance.

2.    Original copy of Transcript of Records or Diploma.

3.     3 pieces 1×1 picture.

4.     Payment of P2,100.00 license and insurance fee.

Breakdown of payment:

- HLURB fee – P750.00

- DTI fee – P600.00

- Insurance – P750.00

This is your chance to become a professional in your business.  Get it now and forget your worries.

This one ain’t feeling the pinch
By Tina Arceo-Dumlao
Philippine Daily Inquirer
First Posted 22:20:00 11/16/2008

ONE SECTOR that is not feeling as pessimistic about its growth prospects over the next few years as the banks and real estate companies is the business process outsourcing industry.

Industry players believe that as top American and European companies desperately find ways to cut costs to stay afloat, they would be forced to ship jobs to countries like the Philippines where the people can do the same job at a fraction of the cost.

The outsourcing industry is already raking in $4 billion in revenue a year and the Business Processing Association of the Philippines (BPAP) believes that there is room for the industry to grow by as much as 40 percent more next year.

Industry leader Convergys shares the view of BPAP and country manager Marife Zamora discussed with the Inquirer in an interview her reasons to be optimistic despite the financial turmoil affecting the developed nations where the call centers derive the bulk of their business.

Q:Do you see the growth in the BPO industry slowing down given the financial crisis in the United States?

A: Convergys continues to see growth in the Philippines. Within five years, we have grown from zero to more than 14,000 employees in the Philippines and will continue to see growth in the area. For example, in May, Convergys announced the addition of five new integrated contact centers to be added throughout the country. We are also currently expanding several existing facilities to meet increased client demand.

Q: Where are the areas of possible growth?

A: As a leader in relationship management, we are continually looking for new opportunities to grow in order to benefit our clients and their customers. Right now, we are focused on opening and staffing Convergys’ five new facilities within the coming months. The first facility, Cebu Asiatown i3, was opened in September. We hope to open two sites in December–UP Science Ayala Park and Nuvali in Laguna. In April 2009, we also hope to open our Glorietta 5 facility in Makati and San Lazaro in Manila.

Q: When you go to the United States to court clients, what do you say are the reasons why they should trust the Philippine workforce?

A: The Philippines continues to be a place that US clients request for their business needs. The biggest advantage that we see is the availability and high quality of the potential employee pool. Employees who are well-educated, English proficient and have a strong affinity to US culture are important to Convergys’ success in the Philippines. We are pleased with the successes we have seen with recruiting in the Philippines and continue to see great numbers of highly qualified applicants. The continued growth of our business in the Philippines is a testament to the high quality of our workforce.

Q: As for Convergys specifically, how many centers do you have and are you still in a growth mode?

A: From a single contact center in Makati, which opened in 2003, Convergys now has 10 contact center facilities in the Philippines–six located throughout Metro Manila, three in Cebu City, and one in Bacolod City. In May of 2008, Convergys announced the addition of five integrated contact centers to be added throughout the country. The new sites include Cebu Asiatown i3, UP Science Park, Nuvali, San Lazaro and Glorietta. In this respect, Convergys is growing in the Philippines at a rapid pace.

Q: How has the Philippines contributed to Convergys’ overall profitability?

A: Unfortunately, we cannot provide specific numbers, as we do not break out our earnings by region, but the Philippines continues to be a country that our clients ask for specifically. The Philippines is an integral part of Convergys’ growing global operations, as evidenced by our continued growth within the country.

Q: What do you think are the major barriers of further growth of the BPO industry in the Philippines?

A: We see a continued opportunity to expand the size of the talent pool within the Philippines. Because of this, Convergys developed the Oral Communications in English program in 2005 which aims to increase the size of our future workforce by teaching English skills to the teachers who will in-turn teach the children, creating the potential to become future employees of Convergys. This intensive two-day program was designed to provide public school teachers with the training they need to teach children proficiency in the English language. We believe this initiative will directly impact the future success of the BPO industry and ensure an English proficient talent pool for our future growth and for the country’s global competitiveness.

Q: How does Convergys help solve the problem with the low passing rate in call centers?

A: In order to solve the problem with the low passing rate, we created the Convergys Academy, a 12-15 day training program for applicants who need additional help. Individuals are given the opportunity to improve their communication skills and eventually, upon success with the program, be hired into the organization.

Q. Is there really a growth path for young employees?

A: Yes, there is a very strong growth path for young employees. In fact, Convergys’ goal is for every employee to become a key point of differentiation and a competitive advantage for the company. Our employees are our greatest resource and by emphasizing talent management, we are able to help them develop their skills and move into bigger and better roles within the company. Convergys believes in ‘building from within’ which will help employees build a future in our company. Among the numerous training and development programs that Convergys provides its employees are a comprehensive step by step career path for its agents and team leaders as well as training and development programs for management within operations and among the resource units. Convergys also features a robust online learning academy called the PDC or Personal Development Center to further develop our employees. For example, several of Convergys’ executives started as agents in a contact center environment, showing the strength of our Talent Management program.

We find more

Cebu’s beautiful homes

than any other website

LandAsiaBIGSellers.com 

 

They Are!!

Realtor Sunshine Hoyo

Land Asia Property Consultant Eva Montecillo

Land Asia Property Consultant Cheryll T. Sevilla

Condo Unit for Rent in Cebu City

Most of the residents in cebu prefer to buy a condo unit specially if it is coveniently located wiuth in the Metropolitan Area of Cebu. Cebu City, Mandaue City, Talisay City, or Lapulapu City.

CEBU CITY, Philippines–An estimated P10-billion residential community is being developed in the mountains of Cebu City.

Monterrazas de Cebu, which literally means mountain terraces, sits on a 200-hectare property and cuts across three barangays (villages) — Labangon, Sapangdaku and Guadalupe.

It is a joint venture of Landco Pacific Corp. and Genvi Development Corp.

Landco president and chief executive officer Alfred X. Burgos said they are currently developing the highest peak (Peak 1) of the eight hills, which covers 90 lots.

Around 20 to 30 percent of these lots are now reserved.

This percentage, Burgos said, is proof that there is healthy interest for real estate development from buyers and potential buyers.

Peak 1 is located 335 meters above sea level, which is equivalent to a 105-story building. Considered as the prime lots, each square meter costs P15, 000.

“We start with the most expensive lots to make a statement that Landco is a very high-end developer. With this arrangement, it would be easy for us to move from top-of-the-line to upper middle class targets,” Burgos said.

Francis V. Ceballos, Landco executive vice president and chief operating officer, said lot prices will be “lower as they move to the lower peaks.”

Along with the houses, condominiums will also rise in the site. Other amenities include a resort-inspired clubhouse, jogging trails, fitness and health facilities and theme parks, among others.

The gated community also features a 24-hour security system, including an electronically-controlled entry system, integrated walkways, graded roadways and other facilities.

Developers have also ensured that the community has 24-hour access to the Internet.

Ceballos said Peak 1 will be on continuous development for the next two years, while the entire project will have ongoing developments (considering all its amenities) in the next 10 years.

Drainage system

As for the drainage system, Ceballos said the developers are working closely with the city government to ensure that flooding will not be an issue.

“We are constructing detention ponds so that rain can be detained for a certain period (up here) before it rushes down (to the plain),” he said.

He added that topnotch engineers, who are working on the site’s infrastructure, are cross-matching data from the Philippine Atmospheric, Geophysical and Astronomical Services Administration and the University of San Carlos.

Landco is a multi-product developer of high-quality residential resorts, leisure farms, residential communities, shopping centers and memorial parks.

It developed the world-class seaside communities of Peninsula de Punta Fuego and Terrazas de Punta Fuego located in Nasugbu, Batangas.

A.   Attend a loan counselling session at the Pag-ibig office concerned and be  briefed on the eligibility.Accomplish a preliminary loan counseling questionnaire, Housing Loan Application (HLA) and Membership Status Verification Slip (MSVS). This will find out if one has an outstanding obligation with
       Home Development Mutual Fund (HMDF).  If eligible, secure the following documents:

        * Members Status Verification Slip (MSVS)
        * Notarized Housing Loan Application (HLA), Principal / Co-borrowers
        * Latest payslip duly certified by the employer (Indicate printed name and designation of assigned signatory)
        * Notarized Certificate of Employment Compensation (CEC)
        * Income Tax Return (ITR) with W2 form
        * Proof of billing address (Electric bills, PLDT. water bills, subscriptions, letters, credit card billing)
        * Certified true copy of Condominium Certificate of Title (CCT). Latest title and its trace back through the Registry of Deeds
        * Tax Declaration of the property and/or parking
        * Tax Receipts of the property
        * Contract to Sell (CTS)
        * Special Power of Attorney (if applicable) (SPA). a) marriage contract / Birth Certificate. B. Valid ID’s Passport, License, Voters I.D. SSS I.D., Company I.D.
        * Location Plan and vicinity map signed by surveyor
        * Building, Electric, Sanitary Permits
        * Building / Floor plans signed by the borrower
        * Specification and Bill of Materials signed by a licensed Engineer.
        * License to Sell, Certificate of Registration and Development Permit (if applicable)
        * Note: Incomplete documents shall not be accepted.    Submit two (2) sets of documents. Original / photocopy. Always bring the original for authentication and verification. Filing fee: P1,000

B.   Receive Notice of Approval / Letter of Guarantee and sign loan documents

C.   Proceed to BIR and present Deed of Absolute Sale (DOAS) between the developer of the condo unit and applicant for payment of documentary stamps and capital gains tax (if needed).

D.   Proceed to the City Hall for payment of transfer tax

E.   Proceed to the Registry of Deeds for payment of Registration Fees for the transfer of title.

F.   Proceed to the Notary Public for notarization of Loan Mortgage Agreement (LMA) and annotation of mortgage with the Registry of Deeds.

G.  Proceed to Assessor’s office to secure new tax declaration in the name of the applicant.

H.  Secure occupancy permit from the local government Unit.

I.    Submit the following documents to Pag-ibig office concerned:

      * Original Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT) in case of a condominium unit, in the name of the applicant with annotated mortgage.
      * DOAS with original Registry of Deeds stamp.
      * New tax declaration in the name of the applicant.
      * Updated real estate tax receipt (if applicable)
      * Occupancy Permit
      * Assignment of loan proceeds to the developer

J.   Release of loan proceeds to the developer

F.  Start amortization on the month immediately following loan take out / final loan release.

Important Note: The requirements above may appear voluminous and the steps may be troublesome to follow through. On the other hand, our group of consultants are trained to work closely with developers so that all these requirements will be complied with for our buyers’s worry free transaction and minimal participation in the process. We do not charge any fees for processing or any commission whatsoever. The developers will take care of us and their prices remain the same even if sales are made without the agents or brokers.