Thursday, October 8, 2009

Floods to force developers to back off; land values dip

By Karen Lapitan, Maricar Cinco
Inquirer Southern Luzon

Posted date: October 08, 2009

LOS BAÑOS, LAGUNA—The lingering flood that inundated 18 towns and two cities in the province of Laguna may scare investors and developers from venturing into real estate businesses in the province.

This is the view of Noel Veracruz, provincial assessor whose office is located in Sta. Cruz, the capital town.

“One effect (of the flooding) is that it may instill a slight fear on the developers. They will now become more choosy (of the area) if it is flood-prone or not,” he said.

This is aside from the statement from the Department of Environment and Natural Resources (DENR) that its flood and geo-hazard map shows that riverbanks, lakeshore areas, creeks, floodways and river mouths are not suitable for settlements.

Nilo Tamoria, head of the DENR-Calabarzon, said efforts were being undertaken by the DENR’s Mines and GeoSciences Bureau to inform the local government units about this.

“Developers usually buy land at a cheap cost so they could sell it off at a higher price. But let’s say they are now to choose between the price of P500 per square meter and P800 per sq. m. for a lot, they may now opt to buy the latter so long as it is not in a flood-prone area,” Veracruz said.

The flood, which submerged lakeshore communities of Laguna, has lingered following the onslaught of Tropical Storm “Ondoy” (international codename: Ketsana).

3 more months

The Laguna Lake Development Authority earlier said the deluge could persist for three more months, given the high water level of the Laguna Lake.

The value of land in Laguna ranges from up to P25,000 per square meter in highly urbanized areas like the town of Biñan to as low as P30 per sq. m. in agricultural lands and areas farther from urban centers, said Rachel Magcalas of the local assessment operations office.

About 40 percent of the total land area of the province, composed mostly of towns in the third and fourth districts, is classified as agricultural.

Asked if the office was expecting land values to depreciate, Magcalas said: “Not exactly, as most of these areas are not really like those of Ayala land. What will happen is that its value (before the flooding) may remain as such but will not appreciate anymore.”

She said that when the flood shall have receded, people would fix or renovate their houses or buildings, adding value to the property. “So it will not really depreciate,” she said.

The affected areas surrounding Laguna Lake are classified as residential, which are valued at between P150 per sq. m. and P200 per sq. m.

More cautious

“If you are to buy a property, you will now be more cautious if it is prone to flooding. The demand now (in these areas) will decrease,” Magcalas said.

On Sept. 28, the Bureau of Local Government Finance in the Calabarzon region (Cavite, Laguna, Batangas, Rizal, Quezon) advised the provincial and municipal assessors and treasurers to conduct an immediate ocular inspection and reassessment of the storm-stricken areas for recomputation of real property taxes.

In the case of Laguna, Magcalas said the flooding had hampered her office in conducting a reassessment.

She said adjustments on taxes, particularly those paid in full for the year, would also be applied after the reassessment.

Affected residents could also take advantage of the real estate tax penalty and interest condonation program that the provincial government started in July. The program will end this year.

Real estate values in Los Baños are likely to suffer due to Ondoy, according to Marcelo Alcachupas, the municipal assessor.

Alcachupas said at least seven of the 14 barangays in the town were gravely affected as the floodwater had not subsided.

He added that this alone could affect the value of the properties, most especially residential ones.

Alcachupas predicted that in three to four months, many residents would sell their properties on rates that could be lower than the prevailing levels.

“It’s up to the discretion of property owners but most likely, there would be a sudden cut in existing rates,” he said.

Within Los Baños, 60 percent of the land is not taxable, he said.

The assessor said the flooding would also affect the tax collection of the municipal office because most of the affected villages were residential areas.

The government collects two percent of the declared value of a real estate.

“After the calamity, there could be more delinquent real estate taxpayers,” Alcachupas said.

He added that the residents might just end up selling some properties once the flood had subsided but might find it difficult to find buyers.

In Barangays Mayondon and Malinta, where the floodwater is still waist-high, the value of residential properties could drop even after a few months, according to Alcachupas.

The prevailing average rate in Barangay Malinta is P1,000 per sq. m., while it is P1,500 per sq. m. in Mayondon.

Barangay Batong Malake, which has the highest prevailing rate that reaches up to P15,000 per sq. m., was spared from the flood.

Selling at rock-bottom prices

Alcachupas himself is planning to sell two pieces of property in Barangay Malinta.

He owns a 542-sq. m. lot that he would soon sell for P1 million even if the ideal price is P1.5 million under the prevailing rates.

He said he would sell his 672-sq. m. house and lot property for P1.5 million instead of P2.5 million. “I have no choice but to sell it at rock-bottom price,” Alcachupas said.

He bought the two properties more than a decade ago.

He already lost around P300,000 worth of property inside his home in Barangay Malinta, including a car which was damaged after the Laguna Lake overflowed.

Alcachupas is now renting an apartment in Barangay Batong Malake, a village far from the flooded areas in Los Baños.

“Our [family’s] safety should come first,” he said.

Nowhere to go

Bec Salazar of Barangay Mayondon, another flooded village in Los Baños town, has no definite plans yet about leaving her bungalow, an inherited property from her parents.

“We have nowhere to go,” she said. Her family is temporarily staying at a relative’s house in a nearby village.

Asked if she would consider selling the family’s 300-sq. m. property, she said, “I am not sure if anyone would be interested to buy it, in the first place.”

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