BY AMADO P. MACASAET
[ Malaya.com.ph ] September 14, 2010
Ayala Land, the pioneer in property development, used to cater to the A, double A and triple A market. This market is small but has plenty of money. This is the segment of society that can buy apartments or condominiums from a low of P4 million to tens of millions of pesos.
Ayala Land still does but recognizes the necessity of making affordable homes.
All along, Ayala Land knew that the bigger market – 37 per cent in Metro Manila alone – is the C market for those who have incomes big enough to buy homes that cost between P400,000 to P1.25 million.
This is the Amaia brand of Ayala Land’s housing strategy. The company has plans of going down even further to the D/E market affordable to even lower income groups who can buy homes at P400,000 and even below.
Yet in the Amaia brand, the company makes homes – detached, duplex, two and four stories – at a low of P400,000 to a high of P1.2 million.
There are other big property developers – including Phinma, Eton Properties, Empire East (subsidiary of Megaworld) and many more – which are heavily involved in socialized housing.
Ayala Land has adopted the policy of sharing what it calls "economic housing" with landowners although it has a sizeable inventory of its own.
The major requirement is a minimum of 15 to 20 hectares. One hectare can be good for as many as 90 units, according to Ricky Celis, assistant vice president of Ayala Land and chief operating officer of Amaia Land Corp. In the next five years, Amaia is expected to complete 47 projects and build 78,000 homes under what it calls "economic housing."
Funds are sourced from Pag-IBIG at a rate of 7 per cent a year to the borrower. Members can borrow as much as P750,000 payable in 15 to 25 years.
Money is also available from the banks. But the interest rate is higher at an average of 8.5 per cent. The repayment period is too short – five years – for the lower income group.
The entry of the big boys in property development into socialized housing has a clear advantage to Pag-IBIG and its members.
It is reasonably assumed that the big developers such as Ayala and its competitors will make sure that the borrower gets his home at the agreed date of delivery. There will be no ghost homes for ghost borrowers.
The trend will likely continue. This should discourage the SSS and the GSIS from going into self-administered housing that disappointed many borrowers.
The entry of large property developers into the lower end of the housing market practically ensures the financial soundness of Pag-IBIG. Meaning, the big boys in the business are reasonably assured that the borrowers for whom they build homes will pay religiously.
Thus, the Pag-IBIG continues to make profits from interest income that in turn can expand further its lending portfolio.
The selection of borrowers is rather rigorous. Celis said this has to be done to make sure there are no ghosts borrowers who get loans from Pag-IBIG. Ghosts do not pay.
Celis admits that given the present birth rate of higher than two pert cent or about two million babies born a year, the property development companies involved in socialized housing will never catch up with the backlog.
But the market, he said, is there to tap. The market is composed of overseas Filipino workers – wetbacks, housemaids, skilled workers such as welders, etc. – who are scattered around the world although the larger number is in the Middle East.
Above the Amaia brand of economic housing is the B class or medium cost homes that sell for P1.25 million to P4 million. Funds are also obtained from Pag-IBIG.
Leon M. Montenegro, president and chief executive officer of Avida Land Corp., a subsidiary Ayala Land that takes care of medium cost housing, said, "Avida has already transformed 682 hectares of idle land into master-planned well-built communities that nurtures family bondage."
In the metropolis, Avida has launched the Avida Towers in Alabang, close to the Madrigal Business Park.
The show-case project of Avida may well be the development of a 2.3-hectare property at the corner of EDSA, Reliance and Mayflower streets in Mandaluyong City.
Ayala Land Corp., which owns Avida, signed an agreement with the Philippine National Bank of Lucio Tan for the development of the project.
The new condominium project is envisioned to "cater to young professionals and start-up families.
The Avida Towers Alabang is a condominium of studios, one-and two-bedroom units priced at a low of P1.6 million to as much as P4.7 million.
One of the best attractions of Avida Alabang Towers, according to Montenegro, is the redefinition of the words "rush hour," "meetings," and "overtime."
Before Avida Towers Alabang came up, Avida had already planned the Avida Estates Nuvali, a 26-hectare estate in Calamba, Laguna.
All told, Ayala Land is cutting a wide swath in the housing market.
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