Buying A Condo In The Philippines

[Stevek]

Hi All

I am in the Philippines now and planning on investing in a condo unit. I am learning lots of things so I will try and keep this thread updated as I go along as it may prove helpful to anyone thinking of doing the same.

So why risk my money in a condo...you can read lots of negative comments on the web and in this forum. So first of all it is a risk and I could afford to lose my money but I really do not want to.

I will be visiting the Philippines for the next few years and I want a form of income over here. The exchange rate is steadily improving for the peso and I see this continuing for the foreseeable future so if you are spending in Peso it makes sense to be earning in Peso. So for me the simplest and least risky investment is a condo that you can rent out at about 8-9% ROI then after about 10 years it will have paid back the initial investment and hopefully you can sell it at a profit

I am just off to Davao now to look at condos over there so I will explain a bit more when I get a chance.

All comments/advice gratefully received
Steve

[Marie]

Steve...I will advise you to be careful in dealing to the persons whom you dont know well.... yes condo is a good investment ....good luck

[Terpe]

Hi All

I am in the Philippines now and planning on investing in a condo unit. I am learning lots of things so I will try and keep this thread updated as I go along as it may prove helpful to anyone thinking of doing the same.

So why risk my money in a condo...you can read lots of negative comments on the web and in this forum. So first of all it is a risk and I could afford to lose my money but I really do not want to.

I will be visiting the Philippines for the next few years and I want a form of income over here. The exchange rate is steadily improving for the peso and I see this continuing for the foreseeable future so if you are spending in Peso it makes sense to be earning in Peso. So for me the simplest and least risky investment is a condo that you can rent out at about 8-9% ROI then after about 10 years it will have paid back the initial investment and hopefully you can sell it at a profit

I am just off to Davao now to look at condos over there so I will explain a bit more when I get a chance.

All comments/advice gratefully received
Steve

Steve, I try always to be positive.
By the way you write your posts I have assumed you have done your research and are comfortable and confident in your approach.

As you will already know, there are up's and down's.
Maybe any negative comments made here in the forum are only made to help others to recognise the many pitfalls.

I do have some personal experiences of buying new, (although I did not finalise) and I also have the benefit of the experience of friends who have made good decision's on pre-owned condo's.

Without sounding negative, I can only suggest to:-
- do your research properly
- understand all your costs
- make sure there are NO unknowns
- understand the processes and potential pitfalls of buying non-completed units
- research and understand the ownership costs of condo's over 10 years old

I wish you good luck and look forward to reading your posts relating to this purchase

Please do be careful

[Moy]

well said terpe..wise words!

[Terpe]

well said terpe..wise words!

As always dear Moy you are my good supporter.
I only try to help as do you.
Thanks and happy new year dear friend

[Moy]

As always dear Moy you are my good supporter.
I only try to help as do you.
Thanks and happy new year dear friend

you dont need to utter those words my friend..yo have a deep understanding on the souls i suppose

happy 2012 to you and your family! wishing all the best in life too

[Stevek]

Hi all, thanks for the advice....so far
Davao - very impressed with this city, I think it is going to expand rapidly and with all the natural resources of mindanao will be the manila of the south. This is what I looked at
Aeon towers - very flash high end condo tower with commercial units at the bottom, very much like Singapore high end. I think it would be possible to make money on the studio units at 2.5mil for 30m2 for holiday let's. Problem is completion is Fefb 2016, so.not for.me

Plays azalea - this is a.large beach based development on samal island - I think samal island has huge potential its a short ride from downtown Davao and yet very unspoilt. If the.much talked about bridge ever gets built then land prices will rocket. Incredibly virtually all the lots are now sold at 15-20k m2...they now have commercial lots available that look very attractive. You basically have a large captive market and you are also allowed to live on the first floor up. Downside of course is a foreigner cannot own the land and it would be expensive approx 10mil for a good sized plot with commercial and living unit....I like this one but the timing is wrong

Also looked at some.new.build 3 bed houses in nice areas of Davao. It seems that Koreans are buying a lot and then building a row.of 3 houses the spec is quite high and the cost is about 5mil and they are selling at that price.

Next stop was bohol so will update when I get a chance

[Stevek]

Bohol - just a quick look at this island, it has a laid back tropical charm and seems to be successfully vying with palawan as the tourists island of RPI. I did not look at pangalao island which appears to be the place to live for most foreigners. I did pick up some information on the royal.palm development on pangalao. It has started pre selling sub division homes with planned swimming pool etc with 4bed 2cr going for about 3.7mil on a 120m2 plot

Next stop is dumaguete.....just heard that Barclays have found an unhealthy correlation between sky scraper building and economy crash...watch out manila!

[Tawi2]

Davao - very impressed with this city, I think it is going to expand rapidly

Largest city in Pinas in terms of land area,and one of the top 10 largest in the world,Charlie Boorman during a travel program once described Dabaw as "A large town in the philippines",one thing is certain for quality of life it nocks manila into a cocked hat,I was in Davao last week,been there every year for just over 20 years and watched it grow and grow,love the place but maybe I am slightly biased

[Stevek]

Dumaguete - lots of foreigners live here. It's a university town with the choice to live along the coast or inland on the slopes of mount talinas. No condos here yet but they have built a large robinsons mall so will not be long. I looked at 2 places in the vicinity of valencia which is a well kept and pretty town about 10k from dumaguete. The air is clean and cool, something quite unique in Phil. So looked at 2 developments.
Camella - A smallish development the show homes are up and it will not have a pool. Cost for a 3 bed 3cr on 142m2 would be 2.8mil with another 500k to have it completely fitted out. Takes 6 month to build.
Tierra alta - this is further up on a ridge with amazing views of coastline and mountains. It's a flash resort and selling lots only at 4.5k/m2. So far they have one very large house nearing completion that cost 10mil total.

So far in my search it has suprised me that most things sell out way before completion. It would be good to buy something already built but it would just be the dregs that no one wants or a sale with a private seller and all the risks that go along with this.I do wonder just who is buying all the property and it seems to be OFWs in the main, but is this just as an investment or to actually live in....mmm...is this a bubble?

[Bluebirdjones]

The bridge Davao - Samal Island has been talked about for a long time.

I even heard talk that the Japanese (a govt grant ?) would build it for free...

.... the ferries that ply the route are owned by politically-connected persons.... so they're keen NOT to get the bridge built.

We own some land there....but in no hurry to develop it.

If you do swing by Davao again, call in at The Red Knight... a few well-informed ex-pats hold court there most nights.

[fred]

mmm...is this a bubble?

No. They don't have property bubbles in the Philippines. Property only goes up.

[Stevek]

Now in bacolod, spent a few days at kookoosnest south of dumaguete...anyone ever stayed here?

Will deffo call in the red night when I am next in Davao. With regards to the bridge I heard about the political connection it just seems to me that as more big players start to get involved with samal then the political tide will slowly turn...but who knows when

Tawi2 I agree with what you say, it seems to me that the rate of change in Phil is accelerating. I can see it but I am only going back 5 years. Would you agree?
I heard a quote yesterday that 10 years ago it was a real suprise to see a car on the roads of dumaguete. Hard to imagine that now.

Fred...I hope property prices do carry on increasing but I have a doomsday scenario for condo prices . I will explain later when I get a chance

Take care
Steve

[Dakila]

Hi Steve,

I am also doing the same and have opened a similar thread.

Have you got any specific areas in mind or are you targeting nationwide?

Do let us know how you get on, it would be great to learn from your experience.

Regards,
Daks

[Stevek]

Hi daks
It was good to read your post and would be good to share information. I am in bacolod right now then iloilo and back to manila. I will update my post when I get a chance. I have been to Field Residence a number of times already and I have it on my short list. I will let you know what I think when I get back to Manila

Steve

[Bluebirdjones]

Steve,

If you have time, take the pump boat out from Iloilo to Guimares.
Certainly not "condo-land", but I've often thought of it as an interesting place to reside on, and/or build a place which will rent out rooms/cabins to visitors.

[Dakila]

Hi Stevek,

I have been to Field Residence a number of times already and I have it on my short list.

SDM has quite a few developments in Metro Manila and if you are interested in checking their other projects or need help, let me know and I can put you in touch with the accredited broker who is also in charge of European Sales.

I look forward to your updates!

Regards,
Daks

[Stevek]

Hi All

So back in Manila now, to round up my trip

Bacolod - Laid back place with great coffee & cake shops and chicken inasal. It has lots of sugar cane which is how it first became wealthy, nowadays they seem to be attracting the call centres and have a well educated population. Its split into downtime by the port with the usual congestion and a very large and smart SM mall (little empty right now). Then we have uptown which is along the road to Silay and the airport, this is were all the development is going on. At present they do not have any condo development but lots of sub division. I visited a few as follows

Ayala Northpoint - This is the premier sub-division split into exclusive lots at 8-9k per m2, then mid range at 5-6k per m2. They then have Avida which is more lot and house, you can get a little 2bed on 75m2 with parking for 1.1mil. I would estimate the current development is 75% sold with maybe 30% of houses built. All lots have very nice facilities. As an investment, I would think about land only (prices gone up about 12% since development started). The Avida homes look like good value and they are building a call centre on the site so could possibly rent to the workers. The downside to the whole development is you would need your own transport. As with all the real estate I have looked at upwards of 75% of buyers are OFW

Town & Country - This is next door to Ayala and sells lots at 4.2k/m2

Camella - 1000 units about 90% sold. This is closer to Bacolod and
they are purchased by OFW for there families back in Bacolod. About 2.65k for a 4 bed 3 bath on 114m2

I will do Iloilo later

[Stevek]

IloIlo

Its about the same size as Bacolod but on the island of Panay with Guimeras island just offshore...little bit like Samal island and Davao (wonder if they have a bridge planned). Never got the chance to visit it but I agree with Bluebirdjones, it could be a beautiful retreat close to a city with all mod cons, looking from the ferry looked like they have some long gorgeous beaches

The city seemed a far more happening kind of place than Bacolod with deep water port, lots going on downtown and again lots of sub division developments going on towards the new airport. Megaworld have bought the old airport for development but do not seem to be selling residential lots or condos at this point. Camella have a 2000 housing lot division with 90% sold. It seems that the main buyers are OFWs working on ships and having the houses built for there families.

Camella - 4.2k/m2 up to 7k/m2 house`and lot from 2mil to 6.5mil

Avida - 6k/m2 with 3 bed 2 bath going for 2.45mil including lot

Green Meadows - A lakeside development at 4k/m2

[Stevek]

Manila

I have some experience of condo's in Manila. I have stayed in a couple in Global City Taguig and I am currently at Chateau Elysee Paranaque.

Global City - If I had to live in Manila then this would be a good place, problem as an investment is that its expensive
Robinsons Trion Towers - 5.1m for a 1 bed at 50.7m2
7.8m for a 2 bed at 76.2m2

Paranaque - South of the city but still accessible to airport, Taguig and Makati. I like the SMDC condos especially the low rise, they are mid range but have very good amenities and plenty of space around them.

Chateau Elysee - Project started about 7 years ago and is just complete with the last remaining units being discounted this month. 3 nice swimming pools tennis court etc
2bed with balcony 2.6m at 48m2
1 bed with balcony 1.3m at 24m2 - I nearly bought this unit today, good quality unit facing Makati skyline at a good price....problem when I viewed is that it also overlooks a very smelly river. Cocktails on the balcony watching the sunset over the Makati skyline...only with breathing apparatus

Fields Residence - A total of 10 low rise towers surrounding a large recreation area with 3 25m pools and 6 kiddie pools. 5 towers are complete the 6th is sold out with the 7th due for completion Oct 2013 having plenty of availability
1 bed with balcony on 10th floor facing the bay is going for 2.04m fully fitted at 27m2
I think this is the best condo investment I have seen, it adjoins the Sucat SM mall and is good for commuting to airport, Makati, Taguig and the new mall of asia resort developments. It also looks like money is going to be spent on improving transport links and facilities in the area. When building 7 is complete the majority of the facilities should also be complete. Units can also be let as vacation properties. I also think 2 professionals working in Manila can afford about 2mil as a first property so would not want to pay much more than 2 million. So just need to do my sums and see if it works as an investment...will do this on my next post

[Jenky]

Hi Steve K

We have a 54 sqM 2 bed unit on the 6th (top) floor of Chateau Elysee (concord building) overlooking the view to Alabang. My wife and kids lived there four 3 years but we have been living here in the UK now for the last two and a half years. The unit is fully owned and paid for, I have the title documents from SMDC. The unit is furnished but has been empty since we came to the UK. I should really rent it out but not being there makes it prone to difficulties.
We went back and stayed for a few days last August on a vacation to the Phil. It cost us back then 2.5 million pesos and has had at least another 500 thousand spent inside, tiled floor, aircon,cooker,furniture etc.
It is now really surplus to our requirements. So if you are looking to buy or rent then it may be something for you to consider.
if you check out my Avatar you may recognise the swimming pool

[Stevek]

Hi Jenks

I am renting a 2 bed in the Concord right now...shame we did not meet up earlier as I would have been interested in renting. I am due to leave in March but if I decide to extend then I would be interested in renting

I think the problem with Condo's in Paranaque is that with all the new build going on and the developers offering payment terms means that there is not much of a market for older condo's. You can get a new 2bed here for 2.59mil as everyone is buying at Field Residence. I guess it will only start when all the available land is developed but with Paris Hilton selling the new Azure mega development I cannot see it happening anytime soon.

There is a rental market at Chateau Elysee as its low cost for the amenities they have. I am paying 16k/month inc dues, I could possibly look at renting the condo for you or I can give you the contact details of the agent I am renting from. As for purchase I have put the numbers in my spreadsheet and it would only work for me at a lot less than you paid, it would of course be cash.

Anyway the best of luck with whatever you decide
Steve

[Rosie1958]

Thank you for taking the time to post some very interesting and helpful information here Stevek

[Stevek]

Thanks Rosie, so to finish up what I have found out

There is a property boom going on in the Philippines, when the big companies release a new sub division or plan a new condo it will be quickly sold out on pre selling. If you want to purchase you have to start paying for something that will not be available for 1-2 years. Every time they sell out they increase the prices for the next phase.The vast majority of people purchasing the property are Filipino Overseas Workers (FOW). They normally purchase on 10-20% downpayment with a 10 year bank loan. They normally purchase for family/retirement/investment

Positives
1. In the middle of a world recession property in RPI is booming
2. If you stick with a big company, Ayala, SM, Robinsons then the build quality and delivery should be very good. I visited Field Residences yesterday and the condo units really are like an upmarket hotel with excellent facilities
3. If you and your mahal want to retire to a provincial city then you can purchase a very nice to really beautiful house on a good sized plot for 2-6m with excellent facilities
4. If you purchase a good quality condo with good facilities in Manila for approx 2m then I think you can make about 9-10% annual return on it by doing short term lets with payback about 10 years. Hotel prices are high in Manila 2k a day for a condo is very competitive when compared to a hotel. Of course it takes a bit of work to achieve this, it would be hands on

Negatives
1. There does not seem to be a market for pre owned condo's. Everyone buys new so it would be very difficult to sell even if its increased in price on paper.
2. A typical development has a life of 50-80 years, after this the owners vote to either sell the land or rebuild the condo's...who knows what this would mean
3. A typical condo development takes about 7 years to complete, if you buy the first units you will have the cheapest price but you will have to wait 6 years to enjoy all the facilities
4. If you purchase a condo and rent it long term you will make about 5-6% annual return. So payback is in about 16 years
5. The weird thing with the developments that I have stayed in is that although all the units are sold out less than half are actually occupied. Not sure what is going on maybe they are just investments but I cannot see how they can pay back if they are not at least rented out.
6. For a RPI couple working in Philippines they would have to earn upwards of 50k a month to get a loan for 2m. That is a good wage here and you would have to be a young well paid professional couple to get a 1 bed. I think soon they will only be affordable for FOW or foreigners

If I was planning on staying in Manila then I would have bought a pre sold condo and let it out for holiday lets/short term. I am not so I have decided not to make an investment.

If anyone wants any further information then just let me know

[Tawi2]

I heard a quote yesterday that 10 years ago it was a real suprise to see a car on the roads of dumaguete.

19 nautical miles off Dumaguete is siquijor,I remember going there 20 years ago and there were no cars whatsoever,the roads were hardpacked dirt,total contrast to today

Guimeras island just offshore

Guimaras is beautiful,if you get the chance pop over,Graham from this forum and myself know an english guy who lived there for a while(phil).

[grahamw48]

I've lost touch with him recently.

I THINK he's still there (in the house he had built), isn't he ?

[Tawi2]

I THINK he's still there (in the house he had built), isn't he ?

Last time I heard he was planning to return to the UK and bring nicky and the kids back but thats was through clive or scottish keith and I havent heard from either of those in a while

[grahamw48]

I remember Clive well...Plant Mechanic.

Here's my boy and me in Travellers when his mum brought him over for a visit one Chinese New Year.

The guy with the blonde hair married a Filipina then inherited a lot of money and started living it large in AC.

.

[Tawi2]

The guy with the blonde hair looks FAMILIAR Which is strange given that I look at myself in the mirror most mornings and dont recognise the guy staring back at me

[grahamw48]

He was an IT expert. For the sake of his privacy I won't name him Paul, but I know what you mean about those mirrors.

I always expect this handsome thirty-something to be looking back at me...not some washed up old bloke. Shocking.