I recently visited a very informative website that focused entirely on expatriating 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!”
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 PHP50,000. 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.
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 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.
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 a owner/seller can also be a very trying experience. You should ask a owner/seller if is okay to bring your own representation (agent or Realtor).
Here is something to ponder; As the dollar declines, so does the purchasing power of the OFW‘s earning 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 the expectations of those who are still residing outside the country.