Condo Goldmine: Evaluating the Investment Outlook for Condominiums in the Philippines

Are condos a good investment in today’s Philippine real estate climate?

A potential investor like you might be wondering about this same question right now. Whether you’re a first-time investor seeking basic advice, or a seasoned property owner looking for market insights, you’ll want real expertise on existing and up-to-date condominium investments in the Philippines today.

Market trends, potential challenges, and financial considerations are all important factors in making an informed investment decision this year. By placing high value on these key economic elements, you can have your own comprehensive analysis of the property market, thus allowing for fewer risks and greater rewards with your Philippine condo investment in the long run.

Explore the diverse landscape of property rental and purchase in the Philippines with DMCI Homes today. Discover expert insights into the overall economic climate in the country and make an informed decision about your financial future when you read this guide right now.

Photo courtesy of Engin Akyurt via Pexels

Observing market trends

As a prospective property buyer, you must follow and study market trends to determine if commitments like pre-selling vs ready-for-occupancy (RFO) condo units are a good idea. In the Philippines’ economic climate, you have to do such research to truly see where its real estate market stands, to determine the stability and longevity of your purchases as early as today.

Here are some of the most relevant facts about the market trends for 2024 that you should take note of as a prospective investor:

1. Gradual growth in the country’s overall economic power

According to real estate experts from Colliers International, the Philippines has slowly but surely been improving its overall economic power, with growth as fast as 7.6% after the COVID-19 pandemic.

The real estate market outlook in the Philippines is also expected to show an annual growth rate of 2% between 2024 to 2028. This means that there will be a projected value of over $6 trillion in this sector, with a whopping market volume of $6.56 trillion by 2028.

This demand for properties, residential homes, and RFO condo units alike, has been steadily increasing over time. This surge in demand has been attributed to country-wide factors like increasing urbanization, a growing middle class, and a decrease in the economy’s overall volatility over the past few post-pandemic years.

2. Government programs creating better momentum for the sector

Improvements in local infrastructure programs have served as another factor that influences the demand and pricing for condo units. With the Philippine government’s ₱9 trillion investment in an infrastructure program, the country has become an ideal landscape where the real estate sector can truly build momentum all over.

This government investment can be observed best in the provinces and regions. With the flagship infrastructure project improving roads, railways, airports, and more, areas outside of Metro Manila are becoming more and more attractive to property developers and buyers alike.

More developers have also opened up condo properties over the years, and buyers have shifted living preferences to the provinces as well. With provincial properties offering more affordable prices, quieter living conditions, and a fresher environment, investors like you can expect an upturn in opportunities beyond the bounds of the country’s capital.

3. Overall stabilization of the Philippine housing market

Resiliency and recovery are the names of the game when it comes to describing the real estate market in the Philippines today. Overall, condo buying has proven to be economically viable this year, due to the stabilization of this market since the onset of the global pandemic.

Factors like slowing inflation, sustained macroeconomic growth, and sound policies have contributed to the stabilization of this sector. With such positive signals for investors, it’s no wonder that the outlook for Philippine property is so exciting for 2024.

So remember to take this optimism with you as you consider buying a condo or apartment in the Philippines today. Additionally, remember to take your finances into account before you take the leap and invest in a condo for your needs.

Need advice on how to assess your spending power for your next property purchase? Read on to discover the major considerations you’ll need to take, such as your down payment fees, turnover expenses, and other miscellaneous costs.

Photo courtesy of Max Rahubovskiy via Pexels

Financial considerations of getting a condo investment

Along with observing market trends and dynamics, you need to assess your financial capabilities when it comes to buying properties in the Philippines. You need to see if there are potential returns that you can anticipate as an investor, along with additional financing options to buffer your account should the need arise.

Here are some of the positive potential returns that you can expect from such an investment in the Philippines:

• Cash flow and passive income - When you buy property like a condo unit and rent it out, you can generate regular rental income which can provide you with a steady cash flow and a passive income stream. This allows you to earn money without having to actively work for it, offering great returns on your investment.
• Portfolio diversification - Purchasing real estate is also a great way to diversify your financial investment portfolio and lower risks to your portfolio overall. Real estate is a tangible asset, thus offering a sense of security for investors because you can actually see and touch this asset, unlike other asset classes like bonds or stocks.
• Potential for appreciation - Because of the upward market trends mentioned in the previous section of this guide, you can expect property in the Philippines to appreciate over time, resulting in capital gains for your benefit. If you invest in a condo in a prime location and resell it at a later date, you can earn big from the increased property values of your asset.

Aside from these returns, you also need to familiarize yourself with the available financing options that’ll help buffer your account for your unit purchase, should the need arise. With DMCI Homes, you can expect the following helpful avenues for owning a condo in the Philippines:

• Bank loan - Also known as a housing loan, this process entails taking out a loan from a bank instead of your developer, which is helpful when you have a tight budget. DMCI Homes lets you take out loans from multiple bank financing partners, including BDO, BPI, Metrobank, AUB, RCBC, PNB, UnionBank, Chinabank, and more.
• Home Ready™ - This last financing option is DMCI Homes’ rent-to-own (RTO) program that allows interested renters to become surefire homeowners after a set period. By leasing a unit for an agreed period, you can purchase the same property afterward, at its original and lower lock-in price.

These potential returns and financing options are incredibly useful when it comes to figuring out your budgeting situation for a condo unit purchase. After all, you’ll also need to think about additional expenses such as reservation fees, turnover costs, renovation and maintenance fees, homeowner association dues, insurance expenses, and many more.

So can your current financial capacity support this checklist of expenses? If it can, then you’re on the right track - but you’ll also need to acknowledge the potential challenges that come from such a financial commitment in your life. Read on to see what these road bumps may be in your real estate journey.

Photo courtesy of Max Rahubovskiy via Pexels

Potential challenges of a condo investment

While there are many good trends and considerations for a spending commitment like a condo, there are still a couple of challenges that you'll need to watch out for when you get started with investing. Factors that may impact your purchase include:

• Bad location - Should your condominium be located in a city that’s too expensive for your capabilities, or too remote for a comfortable living situation, then you might feel the need to renege on this commitment - which can lead to even more negative cash flow.
• Poor development - Structural defects like foundation issues, plumbing problems, and more can lead to you incurring more costs for renovation and maintenance. Make sure to avoid these development risks by thoroughly assessing your target home before buying it.
• Natural and man-made disasters - Of course, you cannot predict if earthquakes, typhoons, wars, or other conflicts and disasters will hit your location. But you can mitigate the effects of these crises by pursuing a condo property that is well-built, politically safe, located away from fault lines or coastal areas, and properly insured as well.

Amid all these potential challenges, the Philippine real estate market is full to the brim with viable prospects for excellent condo investments. Whether you’re coming into this guide as a first-timer or a seasoned investor, you can anticipate an exciting and fulfilling buying experience with a quadruple-A developer like DMCI Homes.

Photo courtesy of PhotoMIX Company via Pexels

Is buying a condo a good investment in the Philippines?

By diving deep into the elements that make up a good real estate investment in the Philippines, you can make an expert and informed decision about the viability of your financial future right now. Take these final tips away with you as you dive into the world of property purchasing in the Philippines:

• Keep track of country-wide economic trends. By observing overall market dynamics around the country, you can anticipate the condominium sector’s volatility and adjust your expectations accordingly.
• Do a comprehensive assessment of your financial situation. Make sure to know your spending capabilities before committing to any long-term investments so you don’t risk major hits to your finances.
• Be ready for any challenge. Expect the unexpected and go for a reliable developer like DMCI Homes for a future-proof investment into your condo home today.

Questions? Check out the DMCI Communities Blog or engage with us on our Facebook. Remember to download the DMCI Communities app on Google Play or the App Store to stay up to date with the latest news and offers too.