If we have double-digit inflation, why do they keep on building condos?

Two launch events I attended recently has made me do a double take on the state of our economy. If real estate companies are building more condos and houses, is there hope for better times ahead? Probably. If there’s one belief that has been inculcated on me by other people, it is that you invest in land today with the hope that prices will appreciate in the future. Still have to test if the hypothesis is true, since I haven’t disposed of any piece of real estate to see if substantial gains can be had…or not.

Another real estate assumption is that it is always good to buy at “preselling” rates. This means plunking down your money on a piece of structure that hasn’t been built yet. The good thing is that you get it at the lowest possible price per square meter. The bad thing is that it will remain a “risk” until the structure or unit is finished and is formally turned over to you. The safest way is always to invest in reputable companies, with a portfolio of fully-completed projects. Another advice is to review the contract so that you can actually recover your downpayment when either the project or the company itself goes down the drain due to bankruptcy or some other reason.

One Pacific Place is one such condominium project that is being sold at preselling rates. The property proponents, ACI Group & Cactus Realty, enjoins its target market to invest in a unit today and occupy it by 2011. Two things it boasts about – a good location in Makati’s Salcedo Village and excellent track record of being the company behind Pan Pacific Hotel Manila. Investors can grab studio units now at P1.9 million or so which is not bad for prevailing prices in the prime business area.

Another property hotspot to look out for are the projects of Alveo Land Corporation, formerly known as Community Innovations. Alveo is the originator of high-end projects in the booming Makati-Taguig boundary such as Two Serendra and the Columns Legaspi Village. They also have a line-up of properties out-of-town, from Laguna to Pampanga. All projects take into consideration environmental sustainability and the well-rounded needs of residents so that you literally “work where you live, and live where you play.” As proof that all is not downtrodden in the economy, Alveo Land posted earnings of P4.8 billion last year, up by an impressive 53% from the income of P3.1 billion in 2006.

I used to have my dream house, but now that am living in it, a condo remains a dream address for the following reasons:

1. Proximity. I think this is the whole point of having a condo, it being a few blocks away from your office, favorite mall or resto. Nothing like walking in the heart of Makati rather than driving for 45 minutes to reach TimeZone.

2. Prestige. As long as it’s not some run-down government project and actually has a landscaped swimming area and high-speed elevator. Wi-fi would be tall order, but yes, that too.

3. Security. Have had friends whose stuff was stolen even in the most uppity condos but it was more of a personal issue than anything else. If all guests are screened in your condo and there are CCTV cameras on every floor, then you should feel safe enough, and that’s good.

4. Value appreciation. Even if some people contend that it’s not wise to invest in a condo since you’re not stepping on a piece of land, a condo in a prime area still appreciates higher than a faraway house in the great suburbs. And a condo unit is easier to rent it out too.