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Fact vs. Fiction: Homeownership in the Philippines

More Filipinos are looking at buying a condominium or a subdivision, whether for investment or personal use. Its popularity, though, makes it prone to misinformation.

What’s the real deal about a Philippine housing loan and ownership? To answer the question, learn to separate fact from fiction.

1. You Can Pay 24 Months of PAGIBIG Contributions One Time

Many people apply for a PAGIBIG loan since it has competitive or even lower interest rates than banks. It also offers longer payment terms.

The problem is, to qualify for the loan, the applicant must be a PAGIBIG member who has already contributed for 24 months. It means it may take a member two years before they can even begin the application process.

Some may then wonder whether the agency allows for a one-time payment. The answer is yes, according to the PAGIBIG website.

Note, though, that rules may change without notice. This data may also be old due to a lack of website updates or maintenance. Better ask the nearest office for more information.

2. The Minimum Down Payment for Condos and Subdivisions Are Different

This claim isn’t valid for the reason that it can still significantly vary between lenders. Usually, the needed down payment is 20%, but some banks may ask for 30% for those buying a condominium unit.

It’s also not impossible to come across sold properties that need only 10%. Others may also waive reservation fees, which are part of the down payment. This way, buyers can spread the amount over several months or years.

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3. Millennials Can Buy Homes Quickly Since They’re Usually Professionals

The answer is no. Data suggest that many millennials struggle to get a housing loan for many reasons:

  • Not enough credit history
  • Competition against experienced or repeat property buyers
  • Cost of the property
  • Inability to meet the requirements of lenders, especially banks

In a survey by ZipMatch, about 41% of the respondents said they hadn’t bought a home because they didn’t have enough money for a deposit. Around 32% admitted they might not be financially capable. Over 20%, meanwhile, shared they didn’t make enough money.

4. Foreigners Cannot Own Condos in the Philippines

In reality, they can, but the law limits their ownership to no more than 40%. It means that if they want to buy such a property, they need to do it through co-ownership with a Filipino. This person’s interest should account for 60% of the purchase.

A foreign corporation can also buy condominium properties as long as the ownership doesn’t exceed 40%.

Dual citizens, though, are an exception. They can apply for 100% ownership of a Philippine condominium as the law still recognizes them as Filipinos.

How about land? Foreigners cannot buy one in the Philippines, but they may lease one for 25 years. They can then use it to build a house.

5. Filipinos Want to Live in Condominiums

In a 2017 survey by Lamudi, most Filipinos (or at least those living in NCR) looked for house and lot than condominiums. Younger buyers, such as millennials, though, seemed to like condos more than subdivisions.

In the end, most potential homebuyers choose a property based on two factors: location and price. In a ZipMatch survey, over 35% wanted to live near public amenities, such as schools or shopping malls.

The homeownership landscape in the Philippines is changing. The points above will help anyone gauge the dynamics of the market and even demand.

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