Our Philippine House Building Project – Final House Construction Cost Report

Our Philippine House - June 2011

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

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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.

 

Comments (22)

  1. My family live in a nearby town, It’s nice to know that you choose to live in the Philippines.

  2. fun reading on the first 12 degree (-10*C?) nite here in Montana! I think itd be easier to buy an existing foreigner built home also. How about a nice POOL? I would think with four dogs you wouldn’t need to worry about security. Ill have 2 german shepards when I move there soon, but I hate bars and locks, and who wants my cheap stuff anyway?

  3. Thanks for sharing this with us.

    If your cost estimate was four years ago and you want to use it now, i think adding 5% to 10% on material cost per year is practice in the Philippines.

    I think hiring a contractor with equipment and power tools and real manpower is a good thing to consider. And hiring a good architect first to design your house.

    Your lot is great. A beautiful garden i could see growing there. Landscaping works some magic.
    :)

  4. Bob,

    Just got home from the Philippines and Ilo Ilo City. By chance are there any websites to look at or real Estate sites to look at homes of foreigners who are selling there dream homes? I looked at property and have read most of your building project cost and would rather buy than build.

    Rick

    • Richard,

      Looking for Philippine real estate online is not very fruitful. Most sellers don’t even list their properties and most real estate agents don’t have websites. You’ll just have to be patient! I suggest that you don’t buy any real estate until you have been in the Philippines for three years and that you spend lots of time learning about the real estate market. Of course, you also have to be confident about your marriage as you can’t own real estate — except for a condo. You take take a look at http://myphilippinelife.com/about-iloilo-real-estate/ which has a few snapshots of real estate we have looked at over the last few years.

      Bob

  5. This is very useful to our report . Thanks!!!
    I would just like to ask about what is the breakdown of labor cost $15,338.0
    specially the roofing part. thank you so much!

    • Louis,

      Sorry, it’s impossible to break out the expense that way. We had two welders working for many weeks building the trusses. They were paid P280 per day each. The ceiling structure is also welded steel. It’s hard to seperate out the labor for that part of the job. That said, it must not have been much with TOTAL labor of $15,000.

      Bob

  6. Being a former Philippine civil engineer (Reg. CE) and currently a US professional engineer (P.E.), my time has now come for me to soon retire in Sta. Barbara, Iloilo from Orlando. I have already bought a lot and in the process of building a small (rest) house. It has been along time doing this work and now I am handling the construction process from here in Florida one item at a time. This time I am starting on the building permit process. I have all the construction plans done per locality standards. I know someone have experienced doing this construction by themselves. If anyone can send me a sample copy of the COST ESTIMATE/CONSTRUCTION COST (current pricing if you please) as my guide as one of the requirement in the permitting submittal, I will greatly appreciate it and looking forward to meeting you there in the near future. Thank you so much.

    • Japsie,

      The cost estimates that we have are in paper and not electronic form and are now three or four years out of date. I could scan them but I don’t know how useful they would be except at a guide to the proper (I hope) format.

      Bob

  7. Nice to see the breakdown of the cost in building the house in the area. We have a family lot in Tolosa Street in Tigbauan. It has very very old house.. and your cost gives me idea how much it needs to renovate/rebuilt it.

  8. the cost of your house is not too much
    .it is a very good and beautiful house and well build and strong
    very well done
    willy coppyn europe

    • Thanks Willy. We agree. We are very happy with our house. One reason it seems expensive is that our lot is so big. With a normal sized lot our house would have cost more that P1M less.

  9. can you provide me information on the cost of steel angle bars in a low cost housing unit. How many steel angle bars are needed to build a 25 sqm to 42 sqm.? How many percent is the share of total angle bars in a low cost housing? thank you very much for your prompt reply!

    • Rose,

      Wish I could help but there are just too many unknowns to give you a useful answer. Low cost housing generally can be built for less than P10,000 per square meter.

      Bob

  10. Thanks for the good advice, were planning having our house built in the near future and were going to buy our own mterials as well, the cost per sqm is that the normal price, we plan on spending a total of 3 to 3.5 million on our house and we found a nice lot for a nice price, and we plan on building the house close to my girlfriend province, so I really am thankful that someone is really putting out some great information which will make my job a lot easier when we start the building process. My girl knows a good contractor and designer and we both talked about buying our own material and supervising the build as well, we want to make sure that the house is built the way we like it so we want to be there, I’ll be busy running our business but were excited and looking forward to getting started as soon were ready, it is a long process we know so were taking our time and not in no rush right now. But thank you for the information. By the way the lot size is around 400 sqm and our house will be around 220 sqm 2 story. Thank you and God bless.

    • Glad the information was helpful. Good luck with your house project!

  11. I think anyone planning to build a house over here needs to plan and therefore budget that you have to provide all the tools needed. You may not need to buy all of it but if it is included in the budget, there will be no nasty surprise. It staggers me beyond belief when tradesmen turn up to do a job and they have no tools. I don’t blame the guys themselves, it is their bosses. I had a compute engineer turn up and all he had was a knife and flat screwdriver and he had bought those himself. A bricklayer arrived on site and again he had nothing and I do man nothing. Now the irony is that the bricklayer was the best worker I have seen yet. I was really happy with his work and especially the finish he put on the wall. I let him keep the 2 trowels I bought. My landlady’s husband laughed at me the next day. The man sold the 2 trowels as soon as he got home for 100 pesos. They cost me nearly 1,000. You can lead a horse to water…..

    Excellent job on this documentary !! There are many things I would like to do differently but that is just simple personal preferences. One thing I will say Bob, I would have missed so many little things that I need to include had I not read your site and as you point out it is these little things that drive the price up. I found the sections on the electricity very interesting. I’m going to try and buy the main things I need like the fuse box, control panel and stuff like that either in Hong Kong or the UK. I will be building my house to go 100% off grid so I need some special inverters and the like. Again I will buy these else where and bring them back with me. I’ll pay the extra carriage charges gladly for the peace of mind.

    Nice job Bob

    Oh, do you find yourself a little bored now that you are not the site foreman 11 hrs a day ?????

    • I think the lack of tools is explained by the fact that these guys may go for long periods with no work. They run out of money and sell or pawn whatever they can.

      Yes, there are many things we’d do differently too!

  12. Pingback: Building our Philippine House – Index | My Philippine Life

  13. Theodore,

    Don’t worry! We really appreciate your comments. Actually we sold the two most expensive tools we bought, the cement mixer and the concrete vibrator. We bought the mixer for P50,000 and sold it for P38,000. The vibrator was P17,000 and we sold it for P13,000. We kept the welder and have used it for other work. I just have not gotten around to selling the rebar cutter.

    A cement mixer is essential. Before we built our house, I debated whether we needed one. Now I can’t imagine building without one.

    Here are the other tools and some comments:

    Hammer Drill. We bought an AEG drill, and not an upscale one. It was excellent. Because we used so much steel it really got a workout. Essential.

    Cut-off saw 14″. Again AEG and heavily used. Held up well. We went through so many blades! Essential.

    4″ angle grinder. Makita. Used constantly. Held up well. Essential.

    Blades: We ended up standardizing on Bosch grinding/cut off blades for decent quality at a modest price. We also used Bosch drill bits which were excellent. Some of the local brands were lousy and cost just as much.

    Planer, hand held electric. Supplied by my foreman. I paid him rent. Essential.

    Jig Saw: AEG but not used much. Quality seems good.

    Circular Saw, Skil 7 1/4″. Bought at end of project. Workers did not know how to use it and did not have enough time to learn before the end of the project. I bought it because there was a good sale.

    Sander. Bosch. It was used quite a bit for wood, “plaster” and Hardiflex joints. Not too impressed with this particular Bosch tool.

    Ladders. We bought a Rigid 7′ fiberglass step ladder. I’m certain it paid for itself. It was in constant use. They could have made do with improvised ladders but more time would have been wasted. We also bought a 16′ aluminum extension ladder. Also very useful. We are still using both of the ladders.

    Levels. The most important thing you can buy — for your workers to use and for you to use to check their work — especially forms before (and after) concrete is poured. The most used by far was the 4′.

    Shovels. We bought about a dozen, mostly Brazilian Tramontina.

    Wheelbarrow. Essential.

    Buckets. Generally the ones made of heavy duty used containers (lubricants, paint, cooking oil) held up best.

    Digging bars. These are welded up from heavy steel pipe with a small blade welded on the end. About 5′ long. Essential for digging, levering, prying etc. A basic Filipino tool, along with a shovel. Many Filipino workers have these. A bit of truck spring makes a very sturdy blade. Here these are called “baras”.

    Wire cutter. We used the utility kind that could be used as both a pliers and a cutter. Given the use of dozens of kilos of 16 gauge tie wire, these are an essential tool. I think I bought six of them and handed them out to key crew members.

    Chalk line/chalk box. Essential but most workers don’t have one. For chalk go to a paint store and buy red iron oxide powder.

    Brace and bit. I happened to have a nice old Stanley brace and a set of bits. This was used quite a bit in building forms for concrete as well as in carpentry.

    Hand saws. Some workers have these and are quite expert with using and sharpening them.

    Hammers. Many workers have their own. I loaned mine out when needed.

    Utility knives – the kind with the disposable blades. Not used much here, but my workers loved them. I consider them to be pretty essential.

    Pencils. You’d be surprised how much time is wasted looking for a pencil. Have a good supply.

    Plumb bobs. Some workers have them. Essential.

    Measuring tapes. It’s good economy to make sure there are enough. Otherwise time is wasted sharing tapes or work gets done without measurement. It’s best to have tapes with both metric and inch markings.

    A stationary planer and table saw could be great but not essential. One of the small Makita portable table saws would have been very useful.

    Transit. I suspect one would be pretty useful if you know how to use it. We did not have one. I give my foreman credit for doing a pretty good job of keeping the geometry of the house correct using simple tools.

    That’s all I can think of right now.

    It’s been raining and raining — just about every day for weeks, but I enjoy the weather. It’s a bit cooler and I like being cozy inside with a book or working on a blog post!

    Bob

  14. This is from Theodore:

    Bob,

    It is not my intention to be an antagonist. I’m just offering different thoughts.

    I read this blog and I understand what you are saying about the equipment you purchased “not being house construction items” only because they are not incorporated as permanent additions.

    However, I disagree with you, because they were necessary expenses in the construction of your home.

    The rebar cutter was not mentioned by you, but was a a very good addition. Less time was required (labor) and fewer hacksaw blades purchased.

    The cement mixer allowed you to pour continuous columns, beams and slabs without worrying if an earlier poured section setup prematurely. It also insured that you maintained the proper cement:sand:aggregate ratio.

    Without the cement mixer, maybe you would have had to hire more laborers and bought more buckets to keep the “bucket brigade” working continuously and uninterrupted. That alone would change “your final expense report” and increased the time to finish your project.

    The welding machine, at a minimum, allowed you and your crew to fabricate custom roof members, custom steel casement windows/security grills and custom steel security screen doors on site.

    Without the welding machine, you would have had to rent a welding machine the entire time or had all of the above mentioned items (and more unmentioned) built in an off site shop – which would have, most assuredly, increased the cost to produce your home.

    The contractor would already have all of the tools that are needed to build a house and would, therefore, not include their expense in the cost of the house. I guess, a person contemplating hiring a contractor to build his/their house could use your adjusted price comparisons as a tool.

    However, somebody like myself who wants to take a more active role, should know all the expenses. It would also be helpful to know which hand tools you were required to have on hand and which were provided by the different craftsmen you hired.

    For example: a finishing hammer, nail set, electric planer and sander, miter saw for door casings/moldings; an electric angle-grinder or circular saw with diamond blade, trowels and floats for concrete work; a four-foot level and two or three-foot level; electric drill with wood/high-speed steel drill bits, hole saw; Teflon spacers for tile work, tile cutter; etc.

    Hope you are not getting too much rain from this latest tropical storm that is passing through.

    Theodore

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