Buy Philippines Property: Myths vs. Facts You Need to Know
Investing in property in the Philippines can be an exciting and rewarding venture. With its vibrant culture, stunning landscapes, and rapidly growing economy, the country offers promising prospects for local and foreign buyers. However, property investment is often clouded by misconceptions that can deter potential stakeholders or lead them to make uninformed decisions.
If you’ve been considering to buy Philippines property but find yourself navigating conflicting opinions, you’re not alone. This blog clears up common myths surrounding real estate investment in the Philippines while guiding you with solid facts.
Buy Philippines Property Myth 1: Foreigners Cannot Own Property in the Philippines
Fact: Foreign nationals can own certain types of property.
A widespread misconception is that foreigners cannot own property in the Philippines outright. While it’s true that land ownership is restricted to Filipino citizens and corporations with at least 60% Filipino ownership, foreigners are still allowed to own condominiums and buildings, provided they do not exceed 40% of the overall ownership in the complex.
For example, a foreign investor could purchase a condominium unit in Manila’s business district, even if they cannot own the actual land. Additionally, foreigners can enter into long-term lease agreements for land (up to 50 years, renewable for another 25 years) if they intend to use it for personal or business purposes.
By understanding these nuances, expats and foreign investors can find legal avenues to invest in the Philippines’ thriving real estate market.
Buy Philippines Property Myth 2: Property Prices Are Always Much Cheaper Than Other Countries
Fact: It depends on the location and type of property.
It’s true that properties in the Philippines can be more affordable than those in many Western countries, but it’s important to consider key factors like location and demand. For example, rural areas or small towns may offer relatively low prices, whereas urban hubs like Metro Manila, Cebu City, or Davao City can command prices comparable to or higher than properties in other Southeast Asian nations.
Before making any assumptions, research the specific location you’re interested in. A high-end condo unit in Makati’s financial district may cost PHP 15 million ($270,000), while a larger plot of land outside Manila, in Pampanga or Batangas, could cost significantly less but come with different benefits.
Buy Philippines Property Myth 3: Real Estate Investment Is Only for the Wealthy
Fact: There are property options for all budgets.
Another common myth is that you need to be ultra-wealthy to invest in property in the Philippines. While luxury developments certainly exist, there is a range of options to suit all budgets. Affordable housing developments, house-and-lot packages, and pre-selling condominium units are widely available, allowing middle-income earners to venture into real estate.
Plus, many developers offer staggered payment schemes or housing loans through commercial banks and the Philippine government’s Pag-IBIG Fund. These financing options make property investment more accessible to individuals who are looking to purchase their first home or diversify their portfolio.
Buy Philippines Property Myth 4: Building or Renovating Properties Is a Nightmare
Fact: It can be smooth with the right resources.
The idea that construction in the Philippines is always unpredictable or slower than expected discourages some buyers from renovating or building their own properties. While delays can occur, much like in any other country, these can often be avoided with proper preparation, including hiring licensed contractors, understanding local permit processes, and setting realistic timelines.
Many buyers trust local professionals and architects to streamline the process of building their dream home or rental property. Partnering with an expert can save time, mitigate challenges, and ensure legal compliance with local regulations.
Buy Philippines Property Myth 5: Rental Yields Are Poor in the Philippines
Fact: Rental yields vary greatly by location and target market.
The assumption that rental income from properties in the Philippines does not generate good ROI is a significant overgeneralization. Rental yields depend on the property type, location, and tenant market. For example, properties in Metro Manila’s posh neighborhoods, like Bonifacio Global City (BGC) or Makati, cater to a mix of expatriates, digital nomads, and corporate executives who are willing to pay a premium for comfort and convenience.
Similarly, vacation homes in popular tourist spots like Boracay, Palawan, or Siargao can generate impressive short-term rental income through platforms like Airbnb, especially during holiday seasons. Strategic property selection and conscientious management ultimately make the difference.
Buy Philippines Property Myth 6: The Philippine Property Market Is Saturated
Fact: There are still high-growth areas.
Some prospective investors may worry that prime locations in the Philippines have already been overdeveloped, leaving little room for growth. However, the real estate market remains dynamic, with many emerging hotspots offering incredible investment opportunities.
Cities like Iloilo, Bacolod, and General Santos are experiencing rapid economic and infrastructural growth, making them attractive options for buyers looking beyond Metro Manila. Government projects like the “Build, Build, Build” program have further boosted interest in these areas by improving accessibility and driving economic expansion.
Myth 7: Property Taxes Are Excessively High
Fact: Taxes are relatively affordable.
While all property investments come with tax obligations, Philippine property taxes are generally lower than those in Western countries. The real property tax in the Philippines ranges from 1% to 2% of the property’s assessed value, depending on the location. Additionally, developers often assist buyers by explaining these taxes upfront, ensuring they’re manageable and predictable.
For rental property owners, rental income is subject to tax, but this is typically offset by the returns on your investment. Staying informed about your obligations ensures greater peace of mind.
Myth 8: The Process of Buying a Property Is Complicated
Fact: It’s straightforward with due diligence.
Purchasing property in the Philippines is a relatively straightforward process when approached with the proper guidance. Buyers can save themselves any headaches by partnering with reputable brokers or developers and conducting due diligence. This includes verifying the property’s legal documentation, such as the Transfer Certificate of Title, Contract to Sell, and Tax Declaration.
For foreigners, it’s also essential to ensure compliance with the rules regarding land ownership—something a local legal expert can assist with. With the vast majority of establishments adopting digital tools, such as online listings and virtual tours, finding and securing your next property is more convenient than ever.
Start Your Property Journey with Knowledge
Investing in property in the Philippines can open doors to incredible opportunities, but like any significant financial decision, it’s crucial to separate myths from facts. By equipping yourself with accurate information and working with experienced professionals, you can confidently create a solid and successful investment plan.
Whether you’re a local resident looking for your next home or a foreigner seeking to diversify your portfolio, the Philippine property market has something for everyone. Take your time, do the research, and explore all your options before making your move—the possibilities are endless!
