buying pre-built apartments

[RexS9999]

I spend a lot of time in the Philippines. There are new developments planned in areas that I like. I am in no rush to live in a purchased apartment as I can rent.
Developers allow one to put up a very small amount up front. Then small monthly fee for five years. When taking possession in five years pay 80% in cash.
In five years likely prices will be higher. Of course there are currency risks. The developer could go bankrupt. Is buying this way too risky? Can someone guide me here? Greatly appreciated. The cost of this is really peanuts. Any loss would not be great.

 

[backpacker]

I spend a lot of time in the Philippines. There are new developments planned in areas that I like. I am in no rush to live in a purchased apartment as I can rent.
Developers allow one to put up a very small amount up front. Then small monthly fee for five years. When taking possession in five years pay 80% in cash.
In five years likely prices will be higher. Of course there are currency risks. The developer could go bankrupt. Is buying this way too risky? Can someone guide me here? Greatly appreciated. The cost of this is really peanuts. Any loss would not be great.

• Main risk is the developer. If it is not one of the big-three developers, check very well.
• Quality of these apartments is miserable. Since you already spend a lot of time in PH you will be aware of that.
• Prices of apartments higher in five years: Maybe! Do not underestimate the amount of new housing being built. Pag-IBIG will also be factor.

 

[CyprusLawyer101]

This is a hire purchasing arrangement. Purely from the information you are providing it appears there is a risk on your 20% initial pay in istallments as I very much doubt any collateral is given for that othet probably than a corporate gurrantee which is nothing. Then when you have to pay the rest 80% you must ensure that you are properlyy securing a title with no encumbrances whatsoever. A local property lawyer should be able to advice on how to succesfully conclude this.

 

[GeneralGogol]

• Main risk is the developer. If it is not one of the big-three developers, check very well.
• Quality of these apartments is miserable. Since you already spend a lot of time in PH you will be aware of that.
• Prices of apartments higher in five years: Maybe! Do not underestimate the amount of new housing being built. Pag-IBIG will also be factor.

100% good advice.

I would also add:
1. There is a LOT of building going on in PH and mostly are skyscrapers which increase the supply very fast. It's not like in Europe where in some cities you have regulatory hurdels to buildings above 7-8 floors.
2. What kind of building takes 5 years to build? Very suspicious.
3. Risk of hurricane, monsoons etc is not zero.

Honestly I don't see any PROs to buying in the PH, apart from hiding some of your wealth in a shithole.

You're taking huge country risk, policy risk, currency risks, real estate can just as easily go down or stay the same. Also city risk, some cities are based only on tourism and if suddenly some pandemic happens your income is suddenly zero.

 

[polonieth]

Given that life expectancy dropped in the last two years, birth rates are down virtually everywhere, and sudden adult death syndrome seems to be knocking people off at will, who is going to live in all these new places being built?

Maybe this won't impact the Philippines, I dunno what their mRNA take-up is.

But I much prefer rent to own. Rent, then buy in cash when you can afford it. None of the liability in between.

And for a place like PH, I'd rather build something myself that I can oversee. Not a big development.