Our Philippine House Building Project - Final House Construction Cost Report
For those of you who have followed our budget reports, there are some changes in this one. In the early stages of the project, we included as house construction expenses items such as equipment purchases, which really are not house construction expenses. Some equipment has been sold (the cement mixer for example) and other item (welding machine,power tools) will be retained for our own use as homeowners. So, we’ve excluded equipment from this and following reports. If you want to add it in, it’s about $2,500.
Also, the carport/garage has morphed into something more extensive as we added a storage/generator/pump house structure and a tiled laundry area. Accordingly, we have attempted to separate house and garage expenses to make our per square meter costs more useful to others. Architects and developers commonly include garages, porches and whatever else they can to try to make per meter costs seem reasonable. When estimating costs they also may exclude many necessary items such as perimeter walls, filling, security grills, air conditioning, door and window screens or even cabinets and plumbing fixtures. Also very cheap grades of materials may be included and the cost of desired upgrades raises the per square meter costs. So, if an architect or builder says he can build a house for P15,000 per square meter you’ll have to examine exactly what’s included and what needs to be added to reach a real construction cost.
Every day one faces decision which affect the cost. Should we use 6″ block for a stronger house — it only costs a P30,000 pesos more! Should the concrete floor be a bit thicker to reduce the chance of cracking? Should we use 1/4″ thick angle bar in building our roof trusses or the thinner and cheaper 5mm? Each of these decisions individually are not terribly significant, but taken together they can raise construction costs from an economical P12,000 per square meter to P20,000 or more. If you buy a house in a subdivision these decisions are so much easier. Every decision has been made to save money–for the developer.
We feel we have saved money and gotten a better house because we hired and supervised our own crew and did all the material shopping ourselves. The roof and ceiling structures are all welded and riveted steel angle bar. We put on the best , heaviest available metal roof including reflective foil and fiberglass insulation. Our security grills and security doors are very substantial. We used Spanish and Malaysian tile, not the less expensive Philippine material. Our countertops are granite. Whenever possible we used top quality plumbing and electrical supplies and fixtures. We’ve installed split air conditioning units in two of the four bedrooms. There are Hunter ceiling fans in each room. Paint is all Boysen. Door casings are 2″ mahogany. Baseboards treated Matwood. Our concrete mixes were very strong. Exterior block is 6″ rather than 4″. There’s lots of extra rebar. We have fancy high-pressure sodium security lighting. We know every square centimeter of our house. It’s not perfect, but is as perfect as we and our crew could make it. Such a project is not for the faint-hearted. There was lots of aggravation and stress during construction, but after six months of living in the house, we feel pretty good about the work and the product.
1/1/2010 through 5/1/11 (in U.S. Dollars)
Total Labor $15,338.65
Total Materials $51,651.27
*Soft Costs $1,278.42
TOTAL COSTS $68,268.34 (P3,072,075)
House (150M²) $61,268 (P2,757,060) (P18,380 per M²)
Garage (48 M²) $7,000 (P315,000) (P6,562 per M²)
All conversions at P45 per USD, an average exchange rate during the period when the house was built.
*Soft costs: architecture, engineering, permits
Notes: The cost of the 1,500M² lot is not included. The lot cost P1,200 per square meter or P1,800,000. The perimeter fence, well and filling of the lot was completed earlier and is not included except that we have rough finished the pre-existing fence as part of the house project. The fence, filling of the lot and well cost P675,000. So, the total cost of land, house and fence is about P5.5 million or $123,000. That does not include appliances and furnishings.
Does spending so much make sense? That’s a highly subjective question. Definitely, don’t spend more on a house than you can afford to lose. The foreigner may not own real property in the Philippines so that whatever a foreigner spends on real estate may gone forever.
For $123,000, one could buy a quite nice home in the U.S. As of now, if we had to sell the Philippine house we could probably only recoup two-thirds our of our costs. On the other hand, if we earned a 4% real return on the $123,000 we would have a monthly income of $410 or P17,630. It is very unlikely that we could rent a place anything so satisfying to us. We are protected against higher housing costs if the US dollar continues to lose value.
There are many other financial (and non-financial) advantages to the Philippines, of course. Property taxes are low. Our wonderful full-time gardener costs less than $100 per month. Already we are harvesting substantial fruits and vegetables. The productivity of our small property (about .4 acres) is amazing. We are home bodies. Our house and property are the centerpiece of our lives, far more than just a place to live.
That brings a final suggestion to mind. Many older foreigners build their dream homes in the Philippines. Many of these come on the market due to sickness, relationship problems and death. Often the houses are very well built and are available for purchase to the cash buyer at much less than they would cost to build.