Frequently Asked Questions on Property Investment in the Philippines

In this post, we answer some of the most frequently asked questions on property investment in the Philippines from a perspective of a foreigner. We will of course mainly discuss about buying condominium in Metro Manila. This is sort of a live post as we try to answer more questions here as time pass and we will also try our best to have the most updated information as possible.

1. Can a foreigner buy land in the Philippines?

Foreigners are prohibited to buy land in the Philippines but can legally own residences. They can enter into a corporation with 40/60 (foreign/local) ownership and through the corporate entity buy land in the Philippines. Another way is to lease land and house (or even build a house from scratch) from a local who owns a piece of land.

2. Can a foreigner buy condominiums in the Philippines?

Yes. The Republic Act No. 4726 June 18, 1966 of the Philippines or more commonly known as the Condominium Act states clearly that foreigners (non-citizens) can own condominium units in a project with 40% or less foreign ownership. There is no limit to the number of units that a foreigner can own as long as the units owned in each project is within the 40% foreign ownership limit. See our guide on buying a condo in Manila. The guide is generally applicable to buying a condo in the Philippines for foreigners as well.

3. How easy is it to do business and buy property in the Philippines?

Although Filipino locals primarily communicates in their native language Tagalog, English is used as the business language in the country. All forms of property contracts are drafted in English language. This makes it very convenient for the foreign investors to do business in the Philippines.

4. Is buying a condo in the Philippines a good investment?

Feelings and subjective opinions aside, the Philippines condominium market offers investors one of the best yields in the region. Couple the fact that this developing country also have one of the fastest growing economy in the world, plus the population demographic is entering a golden window, we think that investing in Philippines at this time will be be a profitable.

5. Which are the reliable real estate developers in the Philippines?

Ayala Land, Megaworld Corporation, Filinvest Land, DMCI Homes, Vista Land & Lifescapes, SM Prime Holdings, Robinsons Land, Federal Land, Shang Properties, Century Properties Group, Anchor Land. See also our guide on property developers in Manila.

6. Where are the best places to invest properties in the Philippines?

Metro Manila is an obvious choice. The metropolis has evolved into a modern city with skyscrapers lining the skyline. Global businesses and BPO companies are also planting their offices in the city. Developers are also moving to cities like Cebu and Davao in the south and building condominiums there. Clark, a former U.S. Army base just 100km north of Manila is also rapidly developing with the influx of foreign and local investments.

7. Which are the best areas to buy investment condo in Manila?

Makati and Taguig (BGC) are good areas for both property appreciation and rental yield. Parananque and Pasay have a lot of interest drawn to the Entertainment City and the casinos in area. Quezon City and Mandaluyong also have stable demand due to regional business districts. See our guide on property hotspots in Manila.

8. What types of condos are available in Manila?

We observed that there are 2 segments in the market. The ultra luxury condominium segment offers bigger units at premium prices. The mainstream market typically offers smaller units. Foreigners may frown on the size of some studio condominium which can be as small as 22 square meters. We think that this actually benefit the investors as the quantum is lower and market entry does not require high amount of cash.

9. How much are the condominium in Manila? Are they expensive?

Developers are selling new projects in key business area such as Makati or Taguig at prices between PHP200,000 to PHP300,000. Outside of these areas, new projects are selling between PHP150,000 to PHP200,000. We expect that prices could be lower on the secondary market as short term investors who entered into the market earlier may offload investments which are already profitable.

10. What is the rental yield of condominium in Metro Manila?

In 2019, the best places to own an investment condo in Metro Manila were Pasay and Paranaque due to a huge influx of Chinese workers who were working in Philippines Offshore Gaming Operators or POGOs. Rental prices reach PHP1500 and even PHP1700 per square meters per month. Some investors who entered early into property market when condos were selling at PHP150,000 per square meters see their gross rental yields easily averaging 10% or more. Other areas in Metro Manila also benefitted from the POGOs and seen their gross yields averaging 7-10%. In 2020, the global pandemic swept the world and send many migrant workers packing home. This will no doubt have an impact on rental yield and we expect gross yields to be more tempered at 5-7%. This is still a respectable return when compared to other similar regions in South-East Asia.

11. What are the annual costs of maintenance for condominium in Metro Manila?

Expect annual costs such as property tax, association dues, insurance and other upkeep costs such as furniture wear and tear. if you are using a real estate agent, you should also set aside 1 month rental as the agent fee.