Property for Sale – Philippines

Overview:

More than 7,000 islands make up the Philippines, but the bulk of its fast-growing population lives on just 11 of them.

Facts:

Capital: Manila

• Population: 104 million
• Area :300,000 sq km (115,831 sq miles)
• Major languages: Filipino, English (both official)
• Major religion: Christianity
• Life expectancy: 66 years (men), 73 years (women)
• Currency: Philippine peso

RESIDENTIAL PROPERTY FACTS

Price (sq.m): $3,952

Rental Yield: 6.13%

Rent/month: $2,422

Income Tax: 4.06%

Roundtrip Cost: 8.63%

Cap Gains Tax: 32.00%

Landlord and Tenant Law: Pro-Landlord

Where to buy:

1. Manila City
2. San Juan City
3. Quezon City
4. Valenzuela City
5. Pasig City

Price History:

The Philippines’ residential property market has performed spectacularly, due to robust economic growth. During the year to Q1 2016, the nationwide residential real estate price index rose by 9.2% (8% inflation-adjusted), according to the Bangko Sentral ng Pilipinas (BSP), the country’s central bank.

Quarter-on-quarter, the index rose 1.9% (1.9% inflation-adjusted) in Q1 2016. The residential real estate price index, published every quarter, is based on bank reports on residential real estate loans.

By property type:

• Condominium unitssaw y-o-y price increase of 12.9% (11.6% inflation-adjusted) in Q1 2016
• For single detached/attached houseprices rose by 8.1% (6.9% inflation-adjusted) y-o-y in Q1 2016
• For duplex houseprices rose by 6.7% (5.5% inflation-adjusted) y-o-y in Q1 2016
• Townhouseprices rose by 8.5% (7.3% inflation-adjusted) over the same period

In the National Capital Region (NCR), residential property prices surged 9.7% (8.5% inflation-adjusted) during the year to Q1 2016 while in Areas Outside the NCR (AONCR), prices rose by 9.4% (8.2% inflation-adjusted), according to the BSP.

On the other hand, prices of high-end condominium units in Metro Manila’s CBDs rose at a much slower pace.

The average price of a luxury 3-bedroom condominium unit in Makati central business district (CBD) rose by a modest 2.4% (1.23% inflation-adjusted) during the year to Q1 2016 to PHP151,622 (US$3,203) per square metre (sq. m.), according to Colliers International – the lowest y-o-y increase in Makati CBD since Q3 2010. During the latest quarter, condominium prices increased 0.2% (0.2% inflation-adjusted) in Q1 2016.

Price rises also slowed in other major Metro Manila CBDs:

• In Rockwell Center, the average price for a 3-bedroom condominium rose by 5.5% (4.3% inflation-adjusted) to PHP162,500 (US$3,433) per sq.m., or a 0.2% q-o-q growth.
• In Fort Bonifacio, the average price for a 3-bedroom condominium increased by 2.6% (1.4% inflation-adjusted) to PHP150,000 (US$3,169) per sq. m., or a 2.6% q-o-q rise.

Foreigners cannot own land, but can own condominium units or apartments in high-rise buildings as long as the foreign proportion does not exceed 40%. They can also buy a house but not the land on which it is built. Leases on land up to 50 years, renewable for another 25 years, are available.

Rental Yields:

Yields in Metro Manila are exceptional, by international standards. The highest-yielding units that we found are 50 square metre units in Ortigas (which have gross rental yields of nearly 9%).

The year before last we found that yields were surprisingly good generally on very large condominiums in Metro Manila (250 square metres), at around 9%