Homeownership is an aspiration for many working Filipinos. While the incomes we earn vary between our professions, it deserves to come to fruition for everyone. Now as different as the ways we make a living are, local real estate is just as varied which gives many the opportunity to become a homeowner.
So understanding our finances is one side of the coin, and knowing which types of property our income can help us afford is the other. Taking into account the twenty-year loan terms common between most banks right now, and the seven-percent interest rate which is the average among them, we provide a glimpse of what the Philippine property market has to offer with the following properties and locations suitable for every income range.
Pre-selling townhouses or foreclosed homes
Suitable for incomes of: Php20,000 to Php24,999 per month
Popular locations: Bulacan, Cavite, Laguna, Rizal
A common, and recommended, practice to help successfully pay for property without compromising too much of one’s finances is to allocate no more than 28-percent of one’s gross income for monthly home loan payments. In the case of those earning an entry-level salary of Php20,000 per month, home loan payments should be no more than Php5,600, which in turn amounts to a loan of about Php525,000 to Php766,000 (depending on your bank) over a twenty-year repayment period.
While seemingly a modest amount in real-estate terms, three-quarters of a million pesos is actually substantial enough when purchasing either foreclosed homes with two-bedrooms or even two-stories or a pre-selling townhouse. The latter can be mostly found in most provinces, however, to garner a little more value, one can opt to buy a townhouse in the Philippines that is still relatively near a major metropolitan area, such as Batangas and Laguna.
Bungalows or townhouses
Suitable for incomes of: Php25,000 to Php34,999 per month
Popular locations: Rural-urban fringes in areas (i.e. Bacolod, Bulacan, Cavite, Rizal, etc.)
For buyers earning a salary over Php25,000 but no more than Php35,000 per month, the median salary of Php30,000 within that range is presently substantial enough to garner an approval for a home of about Php1.3 million, which in turn is enough to buy either a one or two-bedroom bungalow or a townhouse.
Granted, a slight compromise of living outside major metropolitan areas (instead of living conveniently within the city) will have to be made to get such properties at the aforementioned price, but it is worth considering given this means more living space and a larger lot area. Places like Bulacan, Pampanga, and the previously mentioned Laguna also offer more property options and is what makes owning a home with more than one bedroom (and a yard) a greater possibility.
Preselling studio or one-bedroom condominium units
Suitable for incomes of: Php35,000 to Php44,999 per month
Popular locations: Cities with major business districts like Manila and Cebu
Homebuyers earning over Php35,000 a month, and a median of about P40,000, have the choice of buying homes in the previously mentioned rural fringe areas, or modest-sized property in major cities. A higher income makes it a little easier to take on the cost of living in the latter and is enough to qualify for a home loan of around Php1.54 million that can be used to buy a pre-selling studio or one-bedroom condominium unit.
Buying at pre-sale, or before the property is built, not only allows for more favorable prices but also helps leave funding that can be allocated for costs related to condo ownership, such as association and maintenance fees. Expectedly, the farther a home is located from major financial districts, the more affordable it is compared to living in the thick of the business center, and might be worth considering if one wants to live in cities like Manila but still trying to keep property costs at a minimum.
Medium sized houses and lots or two-storey townhouses
Suitable for incomes of Php45,000 to Php54,999 per month
Popular location/s: Batangas, Cavite, Laguna
Afforded more than the options of the previously mentioned income brackets, incomes of P45,000 to P54,999 per month can include two-story townhouses or vacation homes among their property options. Granted, earning a median average monthly income of about P50,000 per month can qualify for home loans at an estimated Php1.91 million, which is also enough for buying a condo unit located in cities like Paranaque or Pasay.
However, there are also viable house and lot for sale options in other locations. These include townhouses with more than one story and with two or more bedrooms, several new properties of which can be found in areas within reasonable distance to major cities, such as those in Bulacan and Batangas. These areas are also popular getaways, making vacation homes to live in or earn rental income from another ideal investment option.
House and lot
Best for incomes of Php55,000 to Php64,999 per month
Best locations: Primary and secondary cities
A median income of Php64,999 per month can these days garner a home loan of Php2.3 million. This amount is enough for a home in some major cities in the Philippines. Of course, to get more land area and floor space without straying too far from major financial centers, buyers can also consider purchasing in secondary cities like Sto. Tomas, Batangas (a place growing in popularity as a residential location given how it borders Laguna Cities Calamba City Los Ba√±os and Alaminos City; and Batangas cities Tanauan, Malvar, and Lipa City.)
The lot and floor areas would expectedly depend on where exactly the property is located. Houses for sale with as many as five bedrooms and more than one bathroom and floor areas that are as much as 250 square meters are a little more available in areas like Valenzuela City or Calamba, while more known areas like Quezon City and Pasay are more akin to mostly having one-bedroom homes with significantly less floor area that are sold in the same under-Php2.5 million range.
Best for incomes of Php65,000 and above per month
Best location: Any area experiencing a steady development and increase in real estate demand
Home seekers with significant earnings can have the run of choices in property acquisition. With that said, an ideal investment for those with Php20,000 or more to spare for property payments each month would benefit greatly from investing it on a vacant lot, particularly in areas experiencing a steady increase in real estate demand like many in the Greater Manila and Cebu areas.
A home loan of about Php4-7 million is sufficient to acquire lots in well-known places like Alabang in Muntinlupa or Batasan Hills in Quezon City, where some are even sold at lower prices. Of course, this depends on the size and location of the property, where venturing out to communities that are a little farther out from the usual metropolis, or considering buying lots that are in foreclosures, allows for the purchase of more affordable lots and the chance to spend more for property construction and improvement.
*Seven percent is the rounded-off average interest rate determined by averaging the present rates of local lenders who offer loans with 20-year terms.
**Down payments were not taken into consideration when matching the estimated loan values with the recommended properties. Therefore, making a down payment will provide the opportunity to either purchase a slightly pricier property, or fund for associated purchase costs (which were also not included).
References: pagibigfund.gov.ph, bdo.com.ph, bpi.com.ph, chinabank.ph, eastwestbanker.ph, hsbc.com.ph, rcbc.com, robinsonsbank.com.ph, securitybank.com
For professional assistance with your real estate purchase, be it loan recommendations or when searching for and buying property, connect with an Ohmyhome Agent, and have someone with you every step of the way.
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Ohmyhome was launched in the Philippines in September 2020, following the company’s establishment of a tech team in the country in 2017. Ohmyhome was originally founded in 2016, and subsequently rose in Singapore as a leading PropTech solution and licensed real estate agency.
Ohmyhome expanded into the Philippines so that Filipino home seekers can have a real estate partner that they can trust to have their best interests at heart and can be relied upon to provide exceptional services throughout the entire property journey.
Featuring thousands of properties across many of the Philippines’ major real estate brands, Ohmyhome differs from other local platforms by going the extra mile and extensively helping buyers narrow down the choices and find the property that best suits their budgets, home needs, and lifestyle preferences.
The company’s Real Estate Agents not only help in the shortlisting of options, but also provide professional services through the entire purchasing process. These include assistance in property inspections, negotiations, the finalization of the Conditions of Sale, deposit collection, the submission of property documents, as well as providing buyers regular updates.
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