Value of houses when buying in the Philippines

Today was a bit of an odd day as we decided to stay at home and look at getting the apartment built on top of the internet cafe. This year we have decided to look at buying two homes to rent out if we can get find the right properties. After scouring the net and being in realtor hell for a few hours it has become very apparent I need to put my shoes on and go and look myself. There are also private sellers and crazy prices online as they are always trying to rip people off for a profit and where better than online.

So I came across a couple of small deca houses which are small to say the least with a price of P600,000 and loan available through PagIbig so I thought great as we could transfer the loans over could be easier than trying to get a direct mortgage as well as the fact we could actually pay P300,000 up front giving us P300,000 to pay. So started doing the maths….

Ok something seriously wrong here they actually want you to GIVE THEM P600,000 for the 5 years they have lived at the property and take on the remaining 25 years of the loan. I sat and done the maths on what they are asking :-

P600,000 up front

Monthly loan of 4,625.00 for 25 yrs = P1.387m

Total = P1.987m just shy of P2m for a house that is worth P750,000

So for them having the property for 5yrs they have paid P277,500 and want a P322,500 golden handshake and I get dumped with their debt of a loan. I really cant understand the logic behind this although speaking to April she said they expect to make a profit for having a property.. Im still scratching my head.

0 comments for “Value of houses when buying in the Philippines

  1. rob
    January 19, 2010 at 12:41 pm

    Hi Matt, close to us someone sold plots on a proposed new sub division, problem was there was a small print clause that said no one can start to build untill everyone had paid in full for their plot not just the reservation fee or deposit the full amount, now there is plenty of fuss and people want their money back which clearly aint gonna happen! – there is always a fool waiting to rush in! Rob

  2. Matt Wilkie
    January 19, 2010 at 2:39 pm

    Hi Rob,
               thanks for your reply. Your 100% right with that sort of thing going on another one I have heard of is Condos being “pre-sold” not knowing the construction hasnt got planning above 4 levels (as most city codes have to be passed above 4). This has left the engineer unable to complete the work even if he did have the intention of doing it and no doubt the people taking the money just shrug their shoulders and pass it to a lawyer to hide them out of the limelight.

    The important factor is not to trust anyone and get a good lawyer. A fool is always easily partied from their money and I seen one worse than the one above at Tubod. P1.5m up front and a 30 year mortgage on 2 houses. Lets just say the houses are worth around P1.5m each but by the time the loan is repaid you could have bought another 5 for the same price.

    One thing that is happening is more people are becoming wise to the way things are being done and starting to ask questions as well as think about the purchases. The end result will be a decrease in house prices because lets face it there is a huge over production of homes in Cebu for example. Yes there is a growing population but most already have land they will build on OR cannot afford to buy a sub-division house. Thats why i am aiming at the poor expat market.. the semi-retired guy just looking for somewhere to rest, get some internet and not got a huge budget. Because there are a lot of them as well as locals who can pay P5,000 – P10,000 a month but P20,000+ ?