BY AMADO P. MACASAET
[ Malaya.com.ph ] July 28, 2011
THERE are several reasons why Vista Land of Manuel Villar is building low-end detached homes.
Villar told Malaya Business Insight in a chance interview that the Filipino has a large family that does not fit into even a two-room condominium that costs a minimum of P2 million to P3 million per unit.
That cost is beyond the reach of the ordinary working man who has five children.
In recognition of this fact, Vista Land has gone heavy building homes on lots averaging 55 square meters for P650,000, amortized over 15 years.
According to Villar, the housing industry, specifically Vista Land, is creating demand for many products that directly benefit the economy and also create hundreds of thousands of jobs.
He explained that 30 percent of the cost of homes in Vista Land is labor. The balance of 70 percent represents raw materials. He said steel bars take up 25 percent; roofing and hollow blocks, 20 per cent; and hardware, 5 percent.
The rest of the cost is made up of office payroll, management and other variable expenses.
Vista Land requires home buyers to get mortgage redemption insurance at an average premium of P4,000 a year depending on the age and state of health of the new home owner.
Villar said Vista Land feels mortgage redemption insurance is a necessary element because in the event that the earning member of the family dies with unpaid amortization, the abode may be foreclosed, thus leaving the occupants back to where they came from – renting modest dwellings.
With mortgage redemption, the home is considered fully paid if the buyer dies before the payment is completed.
Villar explained that insurance companies find mortgage redemption insurance actuarially sound.
So far, Vista Land has built 200,000 low-middle-cost homes. This year, Villar said, his company expects to complete construction of 15,000 such homes.
The rate will be kept at that level for as long as there is a demand. He pointed out that demand for the homes Vista Land builds will not diminish in the coming years, considering the big number of children in every family.
Vista Land offers one of the easiest terms. The company accepts down payment of as low as 5 per cent in the form of equity. The balance is payable in 15 years. Villar said he has made arrangements with Rizal Commercial Banking Corp., which charges interest of only 5 percent if the loan is paid in three months.
He said Vista Land has not stopped buying land in mega Manila although the company has about 2,500 hectares to develop.
In jest, he said working people want to have their own homes so they could be free from their in-laws.
The concentration on lower-cost detached homes does not mean Vista Land has neglected the high-end market.
According to Villar, he has built expensive homes in Portofino in Daang Hari, Las Piñas, for as high as P45 million. This type of two-floor homes is built on an 800 sq.m. lot with a floor area of 650 sq.m.
Villar pointed out that all of the large property developers are in the 30 percent tax payment bracket. Which means, he said, that apart from providing affordable homes, helping create demand for raw materials and jobs, the property developers are becoming big taxpayers.
To help decongest Metro Manila, Villar is building homes in the provinces. The company has two projects in Lipa City and many others in the provinces.
Villar is so determined to become big although he is already among the country’s 40 billionaires, that he said he will leave politics after his term in the Senate expires.
There is so much demand for homes out there, he said. "We can help other industries grow with us," he told Malaya Business Insight.
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