Investing Property in the Philippines

Revised 19th October, 2024. 


Making a real estate investment in the Philippines is a bet on economic and demographic trends. Not only is the Philippines being Southeast Asia’s second most populous country with over 100 million people – it’s also among the region’s fastest growing.


Because of this, the nation will see its economic and political sway rise more than perhaps any of its neighbours. Investors are flocking to the Philippines to profit from its immense growth potential.


Why should you buy real estate in the Philippines? 



Enjoy a rare combination of skilled, English-speaking labour and lower wages. Multinational firms can hire English-speaking workers while spending less here than almost anywhere else on the planet. This has led to foreign business choosing to invest in the Philippines property market over other countries in Asia. Especially tech firms looking for English-speaking support and call center staff. Vietnam, for example, also benefits from its low wages as China’s increase. Yet their talent pool isn’t as vast nor as fluent in English when compared to the Philippines.



Many skilled English-speaking workers have successfully found employment in higher-paying countries such as the United States and Australia. These overseas foreign workers (OFWs) send money back to the Philippines every month to help support their families, which, in turn, also helps boost the local economy. Last year, a record of approximately GBP £32 billion was sent from these overseas workers into the Philippines. That is certainly not a small amount and is considered a lifeline that helps millions of families in the country stay afloat.



This is true not only in the case of foreigners being able to legally own property in the Philippines but also in terms of buying stocks, owning a business, and having the ability to get a long-term visa here. The Philippines’ openness toward foreign investment gives them a significant edge over other countries in the region, such as Indonesia and Laos which are restrictive by comparison.



A golden rule in any investment is always to measure its returns. You can rent out your property whether a condominium or a house at a price that will cover your monthly amortization in case of a loan payment. Also, there are areas with higher rental payments than what you have to pay on your monthly amortization. Investing in real estate will also provide passive income as an extra fund if running a business. An easy way of making money from real estate is selling the property at a higher price. But, that can take a few years. That’s why leasing or renting the property is a good idea. You can also transform the house into an Airbnb or lodging near a tourist destination. But, remember you need to do some upgrades and renovation more often to add value to your guests.



Apart from Return Of Investment (ROI) and liquidity, growing your financial capacity is the main reason you’re starting investments. You will have a multi-income potential once you invest in Philippines real estate. Another significant advantage of investing in real estate in the Philippines is the low entry cost. While all high-price items depreciate fast, real estate will increase in value. Demand will play a part, like when you buy a house in a city with supply restrictions but high demand. But, the rate of appreciation will vary per market. Once there is subdivision development in an area, other developers will have an opportunity. Bases of property appraisal are commercial, residential, and industrial growth. Developments and improvements in various areas increase property values in the Philippines.



Leverage implies the use of financing strategies to enhance your potential ROI. For instance, a 30% mortgage down payment may offer you 100% ownership of your home – leverage. Financing is easy to come by with real estate since it’s a physical asset you can use as collateral.


A rising population by itself means that, in the future, there will almost inevitably be more real estate demand in prime locations. A robust Philippine economy is simply icing on top of a metaphorical cake filled with positive demographic trends and rising demand for homes.



The Philippines is known for its beautiful beaches, diverse landscapes, and rich culture, attracting a significant number of tourists annually. This influx of tourists fuels the hospitality and accommodation sector, making it an opportunity to invest in a condominium particularly in popular tourist destinations like Boracay, Tagaytay, Palawan, and Cebu.


 

The Philippine government has been actively investing in infrastructure projects to support economic growth. Initiatives such as the "Build, Build, Build" program aim to improve transportation networks, connectivity, and overall infrastructure development across the country. Enhanced infrastructure often leads to increased property values in areas benefiting from these developments.




Is Buying Property in the Philippines Safe?

Believe it or not, the Philippines has one of the best land registry systems in Southeast Asia. Real estate owners can even access their title deeds and other information online.


As such, you’re unlikely to encounter any big problems when dealing with the government or land office. Several established property developers exist in the Philippines. Businesses like Shang Properties, Ayala Land, SMDC and RLC Residences have dozens of successful projects under their belts.


Construction and service quality is generally good from these type of corporate firms. Manila even has internationally branded residences such as a Anvaya Cove and a Westin Residences. These brands don’t just let anyone build a project under their name.


Therefore, you shouldn’t have issues buying from top real estate developers in the Philippines. Delays and other problems will likely come from smaller developers.


It’s important to buy from a well-respected developer because of that. Ideally, a firm listed on the Philippine stock exchange with at least ten complete projects.


We recommend doing some due diligence and conducting extensive research on the project, the developer, and the purchase process before buying properties in the Philippines, though. It’s always better to be safe than sorry, especially in a foreign country.