Philippine Real Estate – The Real Cost?

I recently visited a very informative website that focused entirely on expatriation from the U.S.A.  It is a well researched and cogently written site that discusses many things and many overseas destinations, including the Philippines. One thing I noticed though was that the last update to the Philippine information section was in 2006 and it described real estate prices in the Philippines as “Dirt Cheap”. While I believe this was a generic statement, I don’t necessarily find this to be the case. With everything I see, prices are rising rapidly, especially in the metro areas and the coastal and resort areas. And with the continued decline of the Dollar against the Peso, affordability  is on the decline as prices are rising even faster than the demand. I guess comparatively speaking, some beachfront property in the Philippines might be cheaper than equivalent property in the western world, by not by that much. If you want that secluded beach front property with pearl white sand and beautiful sunsets, well all I can say is get in line, take one strong sedative, and  have yourself a “sweet dream!”

Mango Plantation

Mango Plantation

In the interior areas and the more rural locations, land pricing may be found to be more reasonable and in some cases very affordable. I know of some lots in the area where we are building that can be had for about PHP 60,000. They are small but very affordable. It is much easier to locate and understand the real estate market by being in the Philippines, and once there,  one should visit the banks and seek out foreclosures and bank owned properties (REO’s) for bargains.

 Cost???  - $$$$$$$

Cost??? – $$$$$$$

Working in the real estate  industry over the last decade  has taught me something; While there may be many bargains to be  found in many places, there are NO “steals” per se.  While you  might hear of a steal here and there (after the fact), they are usually  never advertised and are almost always grabbed up by those  connected to the inner circles or by the first informed (lucky ones).  Being in the right place at the right time also has a lot to do with  it. Once you get to your destination in the Philippines, staying tuned in is critical to finding a good deal. I would encourage anyone that is new to an area to rent first, settle in, and then learn about where it is you really want to live. Affordability is a critical aspect of landing your dream home or building site, so take your time, look around, and when you think you have seen everything, then look around some more. Network with other expats, friends, family, etc. Build relationships with mortgage bankers and get on their list of potential buyers. When a bank decides to unload a property, and before spending money on advertising, they will usually expedite the selling process by making first contact with their list of investors and buyers. The first rule of real estate investing is “to get there first”.  Patience is always a virtue, and more so when looking for real estate. You should never worry excessively about missing that good deal because there will always be another come along, as long as you’re paying close attention.

There are many internet sites that can be used to locate real estate for sale, some by the owners, and many others by agents and brokerage houses. Searching online is a good place to begin – to get a firm grasp of the real estate market and to understand the competition and values in general. It’s easy to compare properties online, and only as long as they are similar and like properties – ‘apples to apples’ (okay…mangoes to mangoes).  Always keep this in mind – “for sale’ properties that exclusively target foreign buyers can be price inflated.  While I’m sure the spectrum of real estate pricing runs the full gamut, there is certainly something that will fit almost any budget…and in the Philippines, “location, location, location” takes on a whole new meaning. Whether you are looking for “5-star” western conveniences or a jungle nipa hut, you can expect pricing commensurate with your desires.

Buyer Beware!

Buyer Beware!

Never (repeat never), deposit money, or agree to terms, or purchase anything sight unseen, especially online. Always visit the property in person and do your own research. Never (there is that word again) use anybody to assist you in renting, leasing or buying any property unless they themselves are licensed or certified by the Philippine government. Working directly with an owner/seller can also be a very trying experience. You should ask an owner/seller if is okay to bring your own representation (agent, REALTOR®, or lawyer).

 

Where Are Prices Headed?

Where Are Prices Headed?

 

Here is something to ponder;  As the dollar declines against the  peso, so does the purchasing power of the OFW‘s earnings in  dollars. Consequently, could pricing in the Philippine real estate  market segment that is targeted directly at the Balikbayan see  some suppression? In other words, as affordability declines, what  happens to the demand….and supply? An offsetting question would  be: What is the percentage of American dollars invested in real  estate as compared to all other foreign currencies? Or, what or who  is the major driving force for real estate prices in the Philippines?

If you have any thoughts, insights, or comments about real estate pricing or trends in the Philippines, you are encouraged to please share it here. It will sure help out with many expectations of those who are still residing outside the country.

9 thoughts on “Philippine Real Estate – The Real Cost?

  1. I don’t have a clue about real estate, but a lot of the things you say here are common sense and the real estate part, well, I will always be sure to get an expert to assist me with that.

    • Unfortunately most peoples common sense goes right out the window when they get involved in making real estate decisions. Emotions usually replace common sense until much later whey they ask themselves what did they do. Or, they blame their agent for their mistakes. I always loved being on that end of things. :/

  2. Hi Randy.
    I have a boatload of RE on different Islands in the Country. I purchased these between 2006 and 2012.
    Samal Island – 70P sqm Current Value 500P sqm
    Tagaytay Overlooking – 2700p sqm Current Value 10,000P sqm
    Dauin 1700 sqm Current value 3,000 sqm
    Siargao 700 sqm Current Value 1,400 sqm

    So for the most part RE prices are going up and will continue in that manner for prime locations which ours represent. More rural properties cost well under 100P sqm. If it ever becomes easier for foreigners to own then watch out.COREY http://mylifeinthephilippines.com

    • Hey Corey. I would have to agree with you….location, location, beachfront! The best investment property will always be close to the beach or with a view, or in high growth and commercial areas. I’m assuming you and your asawa are in together on your properties and looks like you have done well so far. And like you say, if foreign ownership is ever allowed, property values will skyrocket! We own property in Samar and are currently looking at purchasing some more and hope to be there soon. If my math is correct, you are saying that more rural properties are running about $10,000usd per acre or less. Probably even less for farmland?

  3. There is 2 things that you will get shot for in the Philippines, politics and land. My wife bought lot from her aunt in 85 for P8500.00 before she died. Was titled but was unable to find same at city hall even with papers in hand. Took wife relative paying same and wife when visiting almost 20yrs to get title in her name before I would let her build on it. After building home, still have people coming out of jungle who say they are my wifes relative which she has never heard of, wanting there share of their inheritance. I just tell them to take us to court. Most land in Philippines are not titled, most is claimed by word of mouth or tax certificate.

    • Hey George, thanks for stopping by. It might be the case with some land that it can have title issues (clouded title) where it is difficult to deliver a clear title, but I wouldn’t agree that it is the case with most land. It is always good advice to have an authoritative title search conducted before purchasing lots or land and the subsequent transfer thereof. Notarized deeds should be kept in a safe or a location such as a bank’s safe deposit box as some city halls have a tendency to experience occasional fires of unknown origin.

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