Real Estate Information
By Blue Rose on Sunday, 15 of March , 2009 at 1:08 pm
Since I started this site I have made a lot of friends from all over the world. I also get a number of emails. One of the most common questions is about real estate and condos in the Philippines specially Manila or Makati. That’s good, because foreigners and balikbayans looking to retire in the Philippines constitute an important part of our future. Much of what you can buy depends on your citizen status. If you are a foreigner, you cannot own land. For most people, this simply means that you only can buy condos. For most foreigners, this is a perfect fit. Most new condominiums in Malate, Manila, or Makati are first class all the way. They are clean and secure, and are very close to malls, schools, business, nightlife, or whatever else you want to have nearby.
When much of the world is in shock with the current real estate situation in many countries, the real estate market in the Philippines is quietly chugging along. Recent reports in popular Philippine newspapers have somehow asserted us to the fact that the local property boom is still active and live. The Philippines is a growing area of offshoring and outsourcing and that is still fuelling the local real estate markets.
For all foreign owners who are looking to buy real estate in our beautiful country, I have listed below some additional information which I hope you will find helpful. The general rule is that only Filipino citizens and corporations or partnerships, at least 60% Philippine owned are entitled to acquire land in the Philippines. If holding title as an individual, a typical situation would be that a foreigner married to a Filipino citizen would hold the title in the Filipino spouse’s name. The foreign spouse’s name cannot be on the Title but can be on the contract to buy the property. In the event of death of the Filipino spouse, the foreign spouse is allowed a reasonable amount of time to dispose of the property and collect the proceeds or the property will pass to any Filipino heirs and or relatives. People who is a former natural born Filipino citizen, and now is a citizen of another country is entitled to own for residential purpose 1,000 square meters of residential land, and one hectare of agricultural or farm land. For business purpose 5,000 square meters of urban land or three hectares of rural land.
Foreign leasing of Philippine Real Estate
A foreign national and or corporation may enter into a lease agreement with Filipino landowners for an initial period of up to 50 years, and renewable for another 25 years. Or lease the property in your Philippine Corporation name for an unlimited period.
Financing
I personally think purchasing a condo in a good location may be the best investment solution for Philippinos living abroad and for foreigners. This is relatively easy and there is a range of easy accessible way to finance your purchase.
In-House Financing
With this set up, the developer actually is the one extending a loan to the buyer. Since developers are not financial institution and bear more risk in taking the liability of the buyer’s purchase, hence interest rate is higher. In-house financing is better suggested to those who cannot present the requirements by bank financing. These are the people who are contractual but financially qualified and for those living abroad.
Bank Financing
There are normally banks that are automatically tied-up with developer and are sometimes called “in-house Bank Financing”. With this set up, the buyer doesn’t necessarily need to find his/her own bank and directly apply for a loan. Above requirements are just submitted to the developer, and developer is the one facilitating the papers in behalf of the buyer. This free up the buyer from the legwork needed in processing the papers. You may find or use your personal bank to apply for bank financing.
Standard rate is applied to all approved loan and takes effect during the time of loan approval. Rates in the Philippines vary from other countries. Philippine banks offer 5, 10, 15 years amortization. Some offers up to 20 years financing, depending on the age of the buyer.
Cash purchase with discount
Availability of financing would depend on which type is conveniently adapted by the developer. Some developers are superior on one financing scheme and appear to be disadvantageous on other types of scheme. It is important to investigate each developer’s financing scheme offer and and you can find the advantages as well as the disadvantages.
How much is the down payment?
This would depend on the developer concerned. Normally, developers offer easy down payment such as 20%. (Others go as low as 10%) if the project is pre-selling. Pre-selling is an offer to sell when the construction of the Project is on-going. Some developers offer 12 months to 36 months to pay for the down payment of 30% for on-going projects and the monthly amortization for the balance will only take effect after the full payment of this down payment.
How much is the monthly amortization?
This would depend on the amount of loan approved, the rate of interest, and the terms of payment you have chosen. The most common is the diminishing balance method. This is ideal and equitable to the borrower because the interest will only be applied to the remaining balance of the loan. For this type of financing, we will appreciate if you contact us and we’ll be glad to compute it for you.
I hope this information is useful and please contact me if you want more information or assistance with your purchase.
Blue Rose
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