Is a slowdown of pre-selling to Chinese buyers imminent?
June 14, 2019
In my article “Is there a real estate bubble?” (https://jpatagblog.wordpress.com/2018/12/27/is-there-a-real-estate-bubble/) published last December 21, 2018, I briefly discussed the risks involved in selling pre-selling condos to Mainland Chinese, particularly those who have payment terms.
Events are still unfolding but the inherent risks in selling to foreigners with payment terms are slowly becoming more evident. I’ve just heard (though unconfirmed) that certain developers are now seeing the problem of collecting the balance from these buyers. It seems that projects are starting to turnover and balances have become due. Flipping has also become a problem especially since Developers have outright banned re-sales of units without titles. Chinese or local banks won’t lend money to finance these purchases.
Then there’s also the problem of remitting funds into the country. True enough, I’ve heard that there’s a Chinese broker who is having trouble remitting funds into the Philippines because their government tightened restrictions on remittances. He defaulted from the hundreds of units he reserved and the developer has taken back the units.
So, tread carefully when buying pre-selling units in condos with a large concentration of Mainland Chinese buyers.
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