A primer on Philippine real estate with a focus on Iloilo real estate, Iloilo subdivisions and a couple of suggestions for Iloilo real estate agents — with lots of photos.
Foreigners may not own real property in the Philippines, except condominiums. Even though having your “own place” is irresistible, give deep consideration to renting instead of owning. Buying is much easier than selling. There will be a limited market for your multi-million peso dream home. You may wait years before finding a buyer. If your neighbor decides to raise pigs or start a karaoke bar, you’ll wish you had resisted the lure of home ownership. A renter can just move on. If you own a home you must just bear whatever happens or become involved in foreigner v. local squabbles which you’re unlikely to enjoy.
For the foreigner retiring to or retired in the Philippines another important consideration is health and health care. You may feel perfectly healthy when you retire at 55 or 60 or 65. No matter how fit you may seem now, chances are that you may have major and possibly disabling illnesses in your future.
- Is that beautiful beach property you dream of with easy reach of reasonably good medical care? It’s very possible to go from seeing a doctor once a year to seeing a doctor or doctors once per week. Is that practical from your proposed property? If you rent you can easily move to accommodate changing circumstances.
- Medical care is more affordable in the Philippines but, for a serious illness, it still it can be expensive. If you’re from Europe or North America you’re entitled to free medical care. Will it make sense to return home if you have a chronic illness. If so, what will happen to your dream home in the Philippines? If you rent you can more easily accommodate changing circumstances.
- If you’re a foreigner who’s married a younger Filipino spouse, does the property make sense as a home for her after you’re gone? Are you leaving her with the means of supporting herself and maintaining the house?
There are many subdivisions in Iloilo and surrounding communities and more springing up all the time. Unlike hilly Cebu City, Iloilo is surrounded by flat rice land and fish ponds which are being filled in and developed. Iloilo does not have the pretty hillside subdivisions of Cebu City.
In Iloilo’s “elite” subdivisions lots can cost P4000 to P7000 per square meter or more. Almost always there is a discount for cash, usually 10 to 20%. Prices at the shiny new subdivisions are usually not very negotiable. Since it’s likely the luster will be off the new subdivision in a few years, consider shopping for a lot or existing home in one of the older subdivisions. There are bargains to be had. In my opinion, P3,500 per square meter is a fair price for property in an older Iloilo City subdivision.
Lot size. Foreigners, especially Americans, are often shocked by the small size of building lots in the Philippines. We were. For many Americans, the dream home includes a large yard with plenty of room for landscaping, gardening, BBQ, badminton, swimming pool and so forth. We thought 1,000 square meters is the smallest lot we could live with. After all, 1,000 square meters is about 1/4 acre — a very small lot by American standards. So we went outside the city where prices are lower and bought 1,500 square meters. Only now are we starting to realize the real cost of our transported suburban dream. Most Philippine lots need to be fenced with a hollow-block fence. Most lots in the Iloilo area need to be filled so they will not be flooded during the rainy reason. With a small urban lot, these expenses are relatively small, but the cost of fencing our large lot is very high because there are so many feet of fencing to be done. The same is true with filling. The cost of filling and fencing can equal the cost of the property. Of course we’ll have some of the advantages we dream of; open space, gardens, room for fruit trees, mountain views, clean air and clean water.
I feel that many of the big subdivisions located well outside the city offer questionable value. Per square meter costs can be high given the rural location and, if you buy a house and lot package, the overall cost can be well above the resale value of the property. The picture is even worse if the developer finances your purchase.
We have looked at most of the established subdivisions in Iloilo and, with a few exceptions, we frankly must say we don’t find them to be an impressive lot. Compared to the better Cebu City subdivisions, there seems to be little interest in maintaining the attractiveness of the subdivisions, too little attention goes to maintaining landscaping, roads, sidewalks, lighting, signs and community facilities. Even nicely designed upscale developments seem to fall into decay rather rapidly. Locals tell me this is because, once the subdivision is sold out, control goes to a homeowner association and that property owners just don’t want to spend money to maintain the subdivision, even in subdivisions with quite expensive houses. The better subdivisions in Cebu City (such as Maria Luisa) do a better job.
Some of the possible advantages of buying property and living in a subdivision.
- First of all, there is a certain regularization of surveys, titles and access within most subdivisions. If you buy a lot, especially with cash, your chances of getting a clear title, defined lot lines and road access are fairly good.
- You may also have access to a decent drainage (sewer) system to hook into. I would not buy in an Iloilo subdivision that did not have municipal (NAWASA) water. The quality of municipal water seems to be good but there are increasing shortages. Since you can strike water in Iloilo practically anywhere you can dig a hole, many houses use ground water rather than paying for municipal water. Unless far out in the country, I’d be leery of the quality of such ground water except for laundry and car washing. There are thousands of septic systems and various kinds of commercial waste — all seeping into a shallow water table.
- Just because there is a drainage system does not mean the subdivision will not flood. There are serious flooding problems in many parts of Iloilo. Some high-end subdivisions (and unfortunate lot purchasers) have been more or less abandoned due to flooding. Many parts of Jaro have such problems but flooding is something to consider wherever you look. If you arrive by air look down and you’ll see that Iloilo is barely above sea level and laced with rivers and fish ponds. Unless you are looking at properties during the rainy season, it can be very difficult to determine if a particular property floods. The worst type of flooding is caused by overflowing rivers. More transient flooding can be caused by poor drainage. In Iloilo, flooding can be a passing inconvenience or a disaster when several feet of water and mud pour into your house. You must talk to neighbors, bystanders, pedicab drivers and anyone else you can find to gather information. Typhoon Frank (June 2008) caused terrible flooding problems in Jaro and Pavia subdivisions previously thought to be safe from flooding. There is a flood control project under construction. Sellers may tell you that this project will solve flooding problems, but only time will tell.
- In the Philippines there is really no zoning or effective planning or land use regulation. Outside of subdivisions, it’s common to see big houses cheek-by-jowl with shacks and businesses. Just as the ever-present security guard is a private response to crime and weak law enforcement, subdivisions are a sort of privatized zoning. They have rules governing the types of houses that can be built, commercial uses and keeping of livestock. The rules are often poorly enforced but still can work to provide a more refined environment than you’ll find outside the subdivision.
For example, some gated subdivisions do not allow dogs to roam the subdivision roads and prohibit roosters and other farm animals such as pigs. I have seen and smelt pigs in high end subdivisions. The rules are hard to enforce. Keeping pigs and chickens is a god-given right in the Philippines and irresistible to the thrifty Ilonggo, even if quite well to do. A foreigner seeking to get rules enforced can become entangled in feuds.
- Security. I consider Iloilo to be quite safe, but break-ins are a problem as they are elsewhere in the Philippines. We have friends whose house was broken into the very first night they stayed in their new house. Fortunately they slept through the robbery. They were in a subdivision, but an open one, no guards. Some have guards, but the streets are filled with pedicab drivers and other hangers-about.
There are a very few subdivisions that offer real security with strict admission requirements and roving patrols. Villa Soriano would not let me, a kano in, even with the excuse that I wanted to buy property. That’s strict. I was able to wander about Maria Louisa in Cebu, no problem. Villa Rosario also has pretty good security. Some subdivisions are quite open during the day but stricter at night. Without such security you’ll not want to leave your house unattended.
When I visit a subdivision I look around and gauge a “barbed wire index” as a clue to break in problems. If the compounds in the subdivision have lots of added barbed wire, rebar extensions on top of existing walls to hold even more barbed wire, I figure there is a reason.
I do feel that it’s easier to resell a property in a top subdivision in the City proper because affluent Filipino buyers value security and convenience.
Generally speaking, there are two types of sellers; those who hold real estate as an investment and are willing to wait as long as it takes to get the price they want. Holding property for years in the Philippines is easy as real estate taxes are so low. Then there are those who are motivated sellers who really want to sell and are willing to negotiate. Some motivated sellers have unrealistic expectations, hoping to strike it rich, especially if a foreign buyer shows up. My approach for either type of seller is to decide what a property is worth to me and make an all cash offer. It may be well below the asking price. Probably it will be refused. Be very polite. Don’t lord it over the seller. Explain the problems you have in paying more; kids in college, exchange rates etc. Leave a calling card and ask them to contact you if they change their mind. Be patient. Eventually you’ll find a property you like and a motivated seller.
Monthly rentals suitable for foreigners seem pretty abundant, with monthly rent ranging from P6000 to P25000 per month with P6000 to P8000 typical for two bedroom apartments and P10000 to P15000 for a decent but not lavish house. Really nice free-standing houses to rent can be quite hard to find.
REAL ESTATE PROFESSIONALS:
Below are some real estate brokers who we have enjoyed working with — but of course this must be a conditional recommendation. Always do your own research and make up your mind. I do not accept any payment of any kind from any of these people.
Butch Guzman, Socorro Subdivision, Iloilo City, 0921-551-2717 from outside the Philippines +63-921-551-2717. If you want to send him an e-mail send it to: email@example.com and I’ll get to him.
Mike Corro 0916-729-5472 www.iloilorealestate.com
Real Estate etiquette for foreigners. You are not in Kansas any more. Real estate brokers in the Philippines often struggle to survive. Many do not own vehicles. They may not have computers and can’t engage in lengthy e-mail correspondence with you. This does not mean they are fly-by-night operators, it’s just a reflection of how tough it is to survive in the Philippines. You may have to supply and pay for a vehicle such as a taxi. If they do have a vehicle, give them a couple of hundred pesos to help with gas. Salespersons working for the big subdivisions may have nice vehicles to cart you around in.
Iloilo Real Estate Attorney. We have had very good luck with Jeanette Ong, Casa Plaza Building (adjoins the Atrium Shopping Center), Suite 210, Iloilo City, +63-336-3826, mobile 09209188170. Jeanette is a former Iloilo Registrar of Deeds. She specializes in real estate and has treated us in a honest and straightforward manner.
There’s a very useful Yahoo Group (e-mail list) about Philippine real estate. You can post real estate questions there. The group is run by Dave Williams who has years of experience with Philippine real estate and Philippine real estate problems. You’ll get an unvarnished advice from Mr. Williams. Click the button below to subscribe. It’s free, it’s not a high volume list, is strictly moderated to keep out spam and you can quit anytime
Below are snapshots of properties which we have looked at over the last three years. It’s likely that many have been sold. They are here just to give an idea of the Iloilo real estate market. We do not own or have any other interest in any of these properties nor do we receive any compensation of any kind for showing them here. They are here just to give non-residents dreaming of retiring in Iloilo an idea of the Iloilo real estate market.
Here’s an example of what can be done on a budget in the Philippines:
Our friends bought a 100 square meter lot very near the beach in Villa, Iloilo City for less than $5,000. It has a pretty view of the ocean and they have access to the beach only a few steps away. They are building a small (36 square meter) concrete house for less than $10,000. The house can be expanded by another story. This photo is taken from the future second floor of the house.
NOTE: THE PROPERTIES LISTED BELOW MAY OR MAY NOT STILL BE FOR SALE. THEY ARE GIVEN ONLY TO GIVE EXAMPLES OF WHAT TYPES OF PROPERTIES MAY BE AVAILABLE AND AT WHAT PRICES. PLEASE DO NOT CONTACT US ABOUT THESE PROPERTIES. WE VIEWED THEM 2007-2010. WE HAVE NO CURRENT INFORMATION ON THEM. THANKS