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Yes, the analysis of Manila's property market is included in our pack
Thinking about investing in real estate in Manila? You're not alone!
Many people are captivated by Manila's urban energy and dream of owning a modern apartment or a comfortable house in this city.
Is it financially viable, though? Are property prices increasing in Manila? What is the current trend? Should I buy property in Makati or BGC? Are there any hidden fees? Where can you get a yield above 7%?
In this article, everything is sorted out for you.
The BambooRoutes team has really dug into this market. As a matter of fact, we've organized all our findings in a pack. Get it now.
In the lines below, we'll share useful information and some practical tips.
How is the property market in Manila?
Is the property market getting better or worse? People have different views. We like to be unique and analyze the latest data and stats to make accurate conclusions.
Property types
In Manila, there are various types of properties for sale to meet different preferences and needs.
These include condominiums, which offer convenient city living with shared amenities; townhouses, providing a balance between space and community living; single-family houses, offering more privacy and space; and vacant land or lots, allowing for custom construction.
Additionally, commercial properties like shops, offices, and warehouses are available for business ventures.
Each property type offers its unique features and benefits, catering to a diverse range of buyers in Manila's real estate market.
What's better: buy or rent?
(If you plan to use it yourself and not as a rental)
Whether you're already living in Manila or considering it for your future, you might be wondering about the advantages of buying a property versus renting in this Philippine capital.
Obviously, it's better to buy if you are looking to build equity and have more control over your living space.
Actually, decisions become clearer with the property price-to-rent ratio in mind. This number gives you an idea of how long it will take to break even on the property's purchase using rental income.
According to Numbeo, the property price-to-rent ratio in Manila is around 29.48, which is above the world average.
This value means that, on average, it would take you 29 years of paying rents to afford buying a property in Manila.
Property prices in Manila
On average, according to the last data from Philippine Statistics Authority, purchasing a property in Manila should cost you around $4,500 per square meter.
Naturally, things are quite spread out. An apartment in Makati might have a different price per square meter than a house in Quezon City. We actually give you a more detailed breakdown in our pack for buying property in Manila and in the Philippines.
To put things in perspective, it means that, instead of buying an apartment in Paris or London, you can afford 3 properties in Manila.
Also, housing prices in Manila are 21% cheaper than in Bangkok.
The most expensive neighbourhoods in Manila are probably Makati and Bonifacio Global City, while the cheapest are likely those in the poorer areas of the city.
Trends
First and foremost, we have to acknowledge that the Philippines is, as of now, a vulnerable and fragile country. The last Fragile State Index that has been reported for this place is 80.5.
This is important to remember when wondering if it's a good investment to buy a property in Manila.
If we look at more data, we can see that, according to the IMF’s forecasts, the Philippines's economy is expected to soar by 27.5% in the coming 5 years, resulting in an average GDP growth rate of 5.5%.
If you intend to invest in real estate in Manila it's a good thing because when the economy grows, people often experience an increase in wealth, it typically translates to a surge in housing costs.
Also, in the Philippines, the average GDP per capita has changed by 2.6% over the last 5 years. It's not much, but the growth is here.
This is a strong positive signal: housing prices in Manila might become more expensive in 2024 and later on.
Looking for more updated data? We've done a big-picture study to find out if it's a good idea to purchase property in the Philippines right now.
Buying property in Manila
Buying real estate in Manila can be difficult due to the lack of reliable and updated information, making it difficult to make informed decisions. That's why we have created the pack to buy property in Manila and in the Philippines.
Buying process
In our pack, we've explained the entire process of buying properties in a detailed way. We've pointed out the mistakes to steer clear of, shared tips for finding properties that give you the best returns, and provided information about taxes and necessary documents.
Now, we're giving you a simplified version of the buying process.
This is the step-by-step process to purchase a property in Manila:
- Research properties and budget within specific districts or neighborhoods.
- Engage a licensed Philippine real estate agent.
- Visit and inspect shortlisted properties personally or virtually.
- Secure a Reservation Agreement with a deposit (usually 5-10% of the property price).
- Hire a Filipino lawyer to review documents, including the Title, Tax Declaration, and Building Permit.
- Apply for a Tax Identification Number (TIN) from the Bureau of Internal Revenue (BIR).
- Obtain a Certificate of Employment and Income or a business permit if self-employed.
- Secure a bank loan pre-approval from a Philippine bank.
- Sign the Deed of Absolute Sale with the seller, usually executed in front of a notary public.
- Pay the Transfer Taxes, Capital Gains Tax, and Documentary Stamp Tax.
- Register the property with the Registry of Deeds in Manila.
- Receive the Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT) under your name.
Also, if you're not from the country, you might want to check our article on how to buy property as a foreigner in the Philippines.
Make a profitable investment in Manila
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Where to find a property
Find your dream property in Manila using these websites.
- Myproperty.ph - Lamudi Philippines is a real estate platform offering a wide range of properties for sale and rent in various locations.
- Hoppler - Hoppler is a trusted real estate brokerage in Metro Manila, offering a wide range of homes for sale and rent.
- PropertyAccess - PropertyAccess is an online real estate platform in the Philippines, offering a wide range of properties for sale and rent.
- Property online - They offer real-time listings, exceptional convenience for sellers and lessors, and professional customer service.
- Berenta - Berenta is an online real estate platform in the Philippines that helps users find their dream properties for long-term rent.
Also, know that we have included contacts of real estate agencies, property lawyers, moving companies, expats communities and more in our pack for buying property in the Philippines.
What you can get
As mentioned before, the average price per sqm in Manila is $4,500. A 1-bedroom property of 60 square meters would cost approximately $270,000, and a 2-bedroom property of 85 square meters would cost approximately $383,000.
However, prices will change based on both the property itself and its location.
You can expect prices to be steeper in the upscale parts of Manila. In Makati, a residence might be around $1,090,000, whereas in Bonifacio Global City, a residence could be priced at $1,010,000.
Certain locations are not as costly. You could locate a condominium in Tondo for $150,000, or you may find a condominium in Sampaloc priced at only $120,000.
We give more details about property types and areas in our full pack for buying property in the Philippines.
Risks and pitfalls
Here are the main pitfalls specific to buying property in Manila, Philippines:
- Informal settlements (squatter areas) encroaching on the property.
- Unclear "TCT" titles and potential ownership disputes.
- Complex laws for foreign buyers, requiring a local partner or corporation.
- Limited foreign land ownership rights (condo units allowed, land restricted).
- Frequent changes in property tax laws and rates.
- High risk of natural disasters like typhoons and earthquakes.
- Traffic congestion affecting property accessibility and value.
- Opaque and lengthy bureaucratic processes for permits and approvals.
We don't want this to happen to you, so we have included a full checklist for your property investment in our pack of documents. Avoid these mistakes and save a lot of money.
Everything you need to know is included in our Philippines Property Pack
Living in Manila
Living in Manila is an exciting and vibrant experience, offering an array of cultural, recreational, and entertainment activities, as well as a wide range of property options for those looking to invest.
Cost of living
The cost of living in Manila is generally quite affordable for basic necessities, but can be expensive for luxury items and imported goods. The city has a wide range of prices for housing, food, and transportation, depending on the area and lifestyle.
Here are some examples to better understand the cost of living in Manila:
- Rent for a one-bedroom apartment in the city center: $500-$800 per month.
- Monthly utilities (electricity, water, gas): $70-$100.
- Basic meal at a local restaurant: $3-$5.
- Monthly transportation pass: $20-$30.
- Gasoline (per liter): $0.80-$1.
- Gym membership: $30-$50 per month.
- Internet (60 Mbps, unlimited data): $30-$40 per month.
- Movie ticket: $5-$7.
Neighbourhoods and spots
Since we aim to present information in a clear and reader-friendly manner, we've created a summary table outlining the various neighborhoods in Manila. For yields, prices and rents, check our property pack.
| Neighborhood | Description | Strengths | Weaknesses |
|---|---|---|---|
1. Makati | Makati is a bustling financial district with modern skyscrapers and a vibrant nightlife. | Excellent business opportunities, luxurious shopping centers, and well-developed infrastructure. | High cost of living, heavy traffic congestion. |
2. Quezon City | Quezon City is a populous residential area with a mix of commercial and entertainment hubs. | Diverse culinary scene, numerous shopping options, and cultural landmarks. | Some areas can be crowded and lack proper urban planning. |
3. Intramuros | Intramuros is the historic heart of Manila, known for its colonial Spanish architecture. | Rich cultural heritage, tourist attractions, and a serene atmosphere. | Limited modern amenities, not as vibrant as other neighborhoods. |
4. Bonifacio Global City (BGC) | BGC is a modern, upscale neighborhood with tall buildings, parks, and trendy restaurants. | Safe and well-planned environment, a wide range of recreational activities. | Expensive real estate, can feel a bit artificial compared to older districts. |
5. Malate | Malate offers a mix of old and new, with historic sites, nightlife, and seaside promenades. | Close proximity to cultural attractions, vibrant nightlife. | Some areas may not be safe at night, traffic congestion. |
6. Ermita | Ermita is a lively district with commercial areas, government institutions, and entertainment venues. | Abundance of restaurants and bars, historical landmarks. | Can be crowded and chaotic, occasional safety concerns. |
7. Binondo | Binondo is the world's oldest Chinatown, known for its vibrant street markets and authentic Chinese cuisine. | Cultural immersion, affordable food options. | Busy and crowded, limited parking. |
8. San Juan | San Juan is a predominantly residential area with commercial pockets and a growing food scene. | Close-knit community, good schools, and accessible location. | Limited major shopping centers, some areas prone to flooding. |
9. Pasay | Pasay is known for its entertainment complexes, shopping malls, and proximity to the airport. | Great for travelers, plenty of entertainment options. | Congested traffic, some areas lack cleanliness. |
10. Paranaque | Paranaque offers a mix of residential and industrial areas, with shopping centers and casinos. | Accessible location, entertainment options. | Heavy traffic, air pollution. |
Life in Manila
The economy of Manila is largely driven by services and manufacturing, with the latter being the largest contributor to the city's gross domestic product. Tourism is also a major contributor to the city's economy, with the city being a popular destination for both domestic and international travelers.
According to the IMF's data, the GDP of Manila makes up nearly 47% of the Philippines' GDP. That's a good thing because residents of cities with solid economies usually enjoy better quality services, contributing to a higher standard of living.
What expats usually like the most in Manila is the variety of restaurants and nightlife, as well as the vibrant culture and friendly locals. They also appreciate the city's convenient transportation network and the fact that it is a relatively affordable city to live in.
However, the crime rate of Manila is still very high (with a value of 65, one of the worst scores in the world). The most common crimes in Manila are theft, robbery, drug-related offenses, and physical assaults.
Also, you have to know that Manila is prone to typhoons and flooding because of its location in the Pacific Ring of Fire and proximity to the ocean.
A good point for a property investor - Manila has an extensive mass rapid transit system called the Metro Manila Rail Transit System (MRT-3).
Access to healthcare in Manila is very good, with a Healthcare Index of 63. You probably know that when there's a solid healthcare setup, it makes a location more appealing, which benefits real estate.
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Renting out in Manila
If you're considering purchasing property solely for renting and earning income, you'll find valuable information in this section.
Long-term
Tenant Profiles in Manila
If you decide to buy and rent out to long-term tenants, you should target students, young professionals, and families looking for affordable living in the city. For short-term tenants, you should target travelers and business people looking for short-term accommodations.
Here is a little summary table we've made for you.
| Property type and area | Profiles of potential tenants | What they are looking for | Expected monthly rent in $ |
|---|---|---|---|
Condo in Makati | Professionals, expats | Central business district, convenience | $500 - $1,200 |
Apartment in Quezon City | Families, urban dwellers | Residential area, accessibility | $300 - $800 |
Studio in Bonifacio Global City | Youthful crowd, professionals | Modern living, entertainment | $400 - $1,000 |
House in Alabang | Families, expats | Suburban living, spacious homes | $800 - $2,000 |
2-Bedroom Apartment in Pasig | Young professionals, couples | Convenient location, affordability | $300 - $700 |
High-rise Apartment in Mandaluyong | Urban dwellers, commuters | City access, modern amenities | $400 - $900 |
1-Bedroom Apartment in Pasay | Singles, students | Near universities, local vibe | $200 - $500 |
Rental yields
As of today, rental yields in Manila are within the 3-4% range. It's low. A good rental yield is typically considered to be around 7% or higher (you might know it already).
Rental yields in Manila tend to be highest in areas with good access to public transportation, such as Makati and Quezon City, due to the large number of commuters who need to rent a place close to their workplace. Additionally, residential areas near business districts and universities tend to have higher rental yields, as there is a higher demand for rental properties from students and working professionals.
For further explanation and a more detailed breakdown, you can check the reports and analyses we have made.
Finally, be aware that rental incomes in Manila are taxed at 25%, which is average.
Short-term
You could also decide to rent short-term to tourists visiting Manila, business travelers, or students attending nearby universities. Additionally, you could rent to people in Manila temporarily relocating for work or those on extended vacations.
If you decide to go with that option, look for properties in Makati City, particularly in the Ayala Center area, and in the Bonifacio Global City, both of which are known for their high rental demand.
You will have some competition though - there are around 27,000 Airbnb listings in Manila. The average daily rate is at $38.
You have the opportunity to generate some additional income stream then. According to online testimonials and analytics platform like AirDNA, Guesty and Inside Airbnb, people who offer short-term rentals in Manila can make around $300 per month. Also, the average occupancy rate is estimated at 43%.
Is it worth buying real estate in Manila then?
Absolutely, buying property in Manila can be a fantastic move, but it's not a one-size-fits-all decision.
If you plan to make Manila your long-term home or investment hub, it's a smart choice. The property price-to-rent ratio suggests that buying is economically favorable, and with the country's growing economy, property values could rise in the coming years. Manila's affordability compared to global cities like Paris and London is appealing, making it accessible for investors looking for a lower-cost opportunity.
If you're keen on generating rental income, targeting areas with high rental yields, such as Makati and Quezon City, can be profitable. However, if you're in Manila for a short stay, concerned about natural disasters, wary of complex foreign ownership rules, or bothered by traffic congestion, renting might be the wiser move. The bureaucratic processes and changing property tax laws can also be deterrents for property buyers.
In essence, the decision to buy property in Manila hinges on your long-term plans, risk tolerance, and willingness to navigate complex regulations. It's an enticing prospect for those looking for stability, equity-building, and potential rental income. Still, for those with short-term goals, risk aversion, or concerns about regulatory hurdles and bureaucratic processes, renting offers flexibility without the commitment of property ownership.
Carefully assess your situation, goals, and risk appetite to determine whether buying property in Manila aligns with your personal circumstances and financial aspirations.
Make sure you understand the real estate market in Manila
Don't rush into buying the wrong property in the Philippines. Sit, relax and read our guide to avoid costly mistakes and make the best investment possible.
The content provided here is for informational purposes only and does not imply endorsement or advice. While we strive for accuracy, we do not guarantee the completeness or reliability of the information, including text, images, links, or other elements in this material. Following the content and analyses presented here does not assure specific outcomes. For guidance tailored to your individual circumstances, it is recommended to consult with a professional, such as a lawyer, accountant, or business advisor.