Authored by the expert who managed and guided the team behind the Philippines Property Pack
Yes, the analysis of Manila's property market is included in our pack
If you're reading this, you're likely enchanted by the vibrant city of Manila and are contemplating investing in a condo there.
But what does the buying process entail? Is it straightforward or filled with hurdles? How long should you expect it to take? What challenges might you face along the way?
In this article, we'll walk you through each step of the journey.
Actually, we know this market inside and out. We keep tabs on it regularly, and all our discoveries are reflected in the most recent version of the Philippines Property Pack
The Steps to Buy a Condo in Manila
- 1) Research and Choose a Location
- Identify key areas in Manila that suit your lifestyle and budget, such as Makati, Bonifacio Global City, or Ortigas.
- Consider proximity to work, schools, hospitals, and transportation.
- Research the reputation of developers and the quality of their projects. - 2) Understand Foreign Ownership Laws
- Foreigners can own up to 40% of a condominium project in the Philippines.
- Ensure the condo project complies with this regulation.
- Consult with a local real estate lawyer to understand legal implications. - 3) Secure Financing
- Determine if you will pay in cash or need financing.
- Explore financing options available to foreigners, such as local banks or international mortgage providers.
- Prepare necessary documents like proof of income, identification, and credit history. - 4) Engage a Real Estate Agent
- Hire a licensed real estate agent familiar with the Manila market.
- Ensure the agent has experience working with foreign buyers.
- Use the agent to negotiate prices and terms with developers or sellers. - 5) Conduct Due Diligence
- Verify the property's title and ensure it is free from liens or encumbrances.
- Check the developer's track record and the condo's amenities and management.
- Visit the property to inspect the unit and the building's condition. - 6) Sign the Contract and Pay the Reservation Fee
- Review the contract thoroughly with your lawyer before signing.
- Pay the reservation fee to secure the unit, which is typically non-refundable.
- Ensure all terms, including payment schedules and turnover dates, are clearly stated. - 7) Complete the Purchase
- Pay the down payment and subsequent installments as per the contract.
- Obtain a Condominium Certificate of Title (CCT) once fully paid.
- Register the property with the Land Registration Authority (LRA) to formalize ownership.
Get the full checklist for your due diligence in the Philippines
Don't repeat the same mistakes others have made before you. Make sure everything is in order before signing your sales contract.
What You Need to Know Before Buying a Condo in Manila
What are the legal requirements for foreigners buying a condo in Manila?
Foreigners can legally own a condominium unit in the Philippines, provided that foreign ownership in the building does not exceed 40%.
Buyers must present a valid passport and, in some cases, a visa or Alien Certificate of Registration (ACR) card.
It is advisable to consult with a local attorney to ensure compliance with all legal requirements and to facilitate the transaction process.
How much is the average cost per square meter for a condo in Manila?
The average cost per square meter for a condo in Manila varies depending on the location and amenities, typically ranging from PHP 120,000 to PHP 300,000.
Prime locations such as Makati and Bonifacio Global City tend to be on the higher end of the spectrum.
It's important to consider additional costs such as association dues and property taxes when budgeting for a condo purchase.
What are the financing options available for purchasing a condo?
Buyers can opt for bank financing, which typically offers loan terms of up to 20 years with interest rates ranging from 6% to 8% per annum.
In-house financing is another option, usually provided by the developer, but it often comes with higher interest rates and shorter loan terms.
Some buyers may also consider using a combination of personal savings and financing to cover the purchase cost.
What is the process for securing a mortgage in the Philippines?
To secure a mortgage, buyers must first obtain a pre-approval from a bank, which involves submitting financial documents and undergoing a credit check.
Once pre-approved, the buyer can proceed with the property appraisal and submit the necessary documents for final loan approval.
The entire process can take anywhere from 30 to 60 days, depending on the bank and the completeness of the documentation.
What are the typical closing costs when buying a condo in Manila?
Closing costs generally include transfer taxes, registration fees, and notarial fees, amounting to approximately 5% to 8% of the property's purchase price.
Buyers should also budget for documentary stamp tax and other incidental expenses.
It's advisable to consult with a real estate professional to get a detailed breakdown of the expected closing costs.
Buying real estate in the Philippines can be risky
An increasing number of foreign investors are showing interest in the Philippines. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.
What should I know about property taxes for condos in Manila?
Property taxes in Manila are calculated based on the assessed value of the property, with rates typically around 2% of the assessed value annually.
Condo owners are responsible for paying real property tax (RPT) to the local government unit where the property is located.
Failure to pay property taxes on time can result in penalties and interest charges, so it's important to stay informed about payment deadlines.
How does the reservation process work for a condo purchase?
To reserve a condo unit, buyers typically need to pay a reservation fee, which can range from PHP 20,000 to PHP 100,000, depending on the developer and the property.
This fee is usually non-refundable but can be deducted from the down payment or total purchase price.
Once the reservation fee is paid, the buyer will be given a period to complete the necessary documentation and secure financing.
What are the common amenities offered in Manila condos?
Many condos in Manila offer amenities such as swimming pools, fitness centers, and function rooms for residents' use.
Some developments also provide additional features like children's play areas, jogging paths, and 24-hour security services.
The availability and quality of amenities can significantly impact the overall living experience and should be considered when choosing a condo.
How can I verify the credibility of a condo developer in Manila?
To verify a developer's credibility, check their track record by researching past projects and seeking feedback from current residents.
It's also advisable to confirm that the developer is registered with the Housing and Land Use Regulatory Board (HLURB) and has the necessary permits and licenses.
Consulting with a real estate agent or lawyer can provide additional insights into the developer's reputation and reliability.
What is the typical down payment required for a condo purchase?
The typical down payment for a condo in Manila ranges from 10% to 30% of the total purchase price, depending on the developer and financing terms.
Some developers offer flexible payment schemes or promotions that may reduce the initial down payment requirement.
It's important to review the payment terms carefully and ensure that they align with your financial capabilities.
Are there any restrictions on renting out a condo unit in Manila?
Condo owners can generally rent out their units, but they must comply with the building's rules and regulations regarding leasing.
Some developments may have restrictions on short-term rentals, such as those offered through platforms like Airbnb.
It's crucial to review the condo's bylaws and consult with the property management office before proceeding with rental arrangements.
What should I consider when choosing a location for my condo in Manila?
When choosing a location, consider factors such as proximity to work, schools, and essential services like hospitals and shopping centers.
Traffic congestion and accessibility to public transportation are also important considerations in Manila's urban environment.
Researching the neighborhood's safety, future development plans, and property value trends can help make an informed decision.