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Friday, April 22, 2016

The Philippine Real Estate Bubble Has Also Burst for Vista Land

Last year, we documented how the Philippine Real Estate Bubble had already burst for HOUSE (8990 Holdings, Inc.) wherein there was a marked deterioration in 2014 in delinquencies in the company's installment contract receivables (ICRs) for the year 2014.

A simple chart tells the story:

 
Simply put, 8990's ICRs that were over ninety days past due jumped by a minimum factor of 10 times in the year 2014. Around 10% of HOUSE's ICRs became impaired.



In a subsequent post on a related blog, we noted that a similar dynamic was playing out in Vista Land & Lifescapes, Inc. (VLL), one of HOUSE's main rivals in the mass housing market space. Although not quite as acute as HOUSE, VLL exhibited a significant deterioration in the credit quality of its ICRs.







 


The deterioration has continued throughout the whole of 2015,  confirming that real estate bubble has also burst for VLL.  In 2015, there was a marked jump in VLL's ICRs that were over 90 days past due.  





Like HOUSE, there was more than a ten-fold jump in impaired ICRs in 2015.  Unlike HOUSE, the value of the impairments relative to the entire ICR portfolio is very small - less than 1% for VLL versus 10% for HOUSE.



Source: Vista Land & Lifescapes, Inc.

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