The Condo Craze

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The big thing in Davao these days seems to be Condo units.  They are being built all over town.  Most of these condo developements involve multiple buildings too.  What I have seen around town are condo buildings that are between 4 levels and 6 levels or so.  Just a year or so ago, there were no condos available in Davao that I am aware of.  Now, there is one condo development that is complete, or close to complete anyway.  I know that some units are already occupied.

Over the weekend, I had a guest in town visiting, and he told me that he was interested in possibly buying a condo in Davao, both as a place to stay when he visits Davao, and also for his eventual residence in Davao.  Because of his interest, I decided to take him around to a few places that I knew were under construction around town.  We first went and visited a new development of three buildings, 5 levels each, which is in the El Rio area.  They are not yet under construction, but it looks like they are very near to getting underway.

Ecoland Condo UnitsNext, we went and looked at the site where Linmarr will be building Condos, which is in the Agdao area.  One of our regular contributors here on LiP is a part of that project, but I am not sure if she wants me to publicly use her name, so I won’t.  If she wants to jump in and answer any questions about Limarr Condos, she can do so in the comments.

Over in Ecoland, near to SM City, that is where you will find the one Condominium building that is complete, and also there is another Condo development which is already under construction across the street.  The new one that just got started is a project of Philippine property development company, FilInvest.

One thing that my friend was looking for is a high rise unit, maybe 20 floors or so, possibly more.  He really wanted to buy something at or near the top, so that he could enjoy a great view, especially of the water.  However, there are no such units coming to Davao, at least at this time.  Some of these units have 4 or 5 buildings of 5 floors each, so a single 20 floor unit would seem to make sense, unless the extra cost of such a tall building would rule it out.

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Philippine Condos

Philippine Condos

On many of these type of projects, you can buy in early for a very low payment per month.  The developers generally do this in order to raise cash in order to fund the project.  Some people like to buy into these units at a very early stage, and then sell them once the project is complete, because the units generally appreciate in price quickly  However, in today’s financial roller coaster, I think it is not a wise idea to look at this as an investment vehicle, because prices can move in either direction, right?

One advantage for foreigners is that under Philippine law, even though you cannot legally own property, you can own a condo!  Condominium developers can sell up to 40% of the units to foreigners and the unit can be held in the name of the foreigner.  For unmarried foreigners, this is a real advantage, and one reason why I am happy to see condos come into the Davao market!

Post Author: MindanaoBob (328 Posts)

Bob Martin is the Publisher & Editor in Chief of the Live in the Philippines Web Magazine. Bob is an Internet Entrepreneur who is based in Davao. Bob is an American who has lived permanently in Mindanao since May 2000. Here in Mindanao, Bob has resided in General Santos City, and now in Davao City. Bob is the owner of this website and many others.


Comments

  1. AussieLee says

    HI Bob,
    It is great to be able to own something in your own name and really appeals for that reason alone to a single bloke like myself. What I have trouble with, big time, is not being able to get outside. I almost live outside. I don't watch a lot of TV and I don't like being couped up. What I would like to see someone build (at least for me) is a smaller development with a small bit of land around that you can easily access. Plus I have heard you comment before on the diminutive size of these apartments. Is this still the case? Also, the 40% rule is interesting. What is the typical profile of the local purchaser? You mentioned before you may be interested in a few small scale developments yourself . . . .still interested??

  2. rick b says

    Bob

    These Condo units do not look like a good financial investment to me (i had a brief look myself) but they were too small and too expensive for my pocket and requirements, BUT they seemed to have attracted a lot of sales, …… like for example completed units were sold out……….so, i guess they must suit some peoples circumstances or their financial planning.

    Can't really see 20 storey buildings here in davao for residential purposes but you never know

  3. Paul says

    Hi Bob – Wonder if there is a possibility of over-developing condominiums in Davao? If I remember my U.S. housing industry history correctly, there was excessive condominium development in between the last two surges in single family housing construction (the last suffering from the bursting of the housing bubble). When the last surge in SFH started, there was a saying in the industry: "Condos are like vd – both are hard to get rid of."

    While I'm sure there won't be any surge in SFH construction anytime soon in the Phils, condos still have a few potential problems that need to be investigated and resolved before investment. A number of condo projects around the Phils are going bankrupt because developers are forced to depend heavily in pre-construction and mid-construction sales for financing. More than a few balikbayan friends here in SoCal have been left with a useless condo contract in different areas about the Phils.

    Fingers-crossed, this won't be the case in Davao.

  4. richard says

    It truly is amazing about the phenomenal growth of condominium construction in the Philippines in general. Imagine there are new condos in Fort Bonafacio near Makati, Serendra Condo complex for example selling for 100,000P per SQM this is like $208 sqf at 48 peso to the dollar. Just a few months ago when the dollar was at 40 this translates into $250sqf. In fact average prices in the Makati area would range from about 30,000P sqm for older units say in Salcedo to 60,000 – 80,000P sqm in the Fort. We even were curious and looked at some here in Davao and found them around 60000P sqm or $125sqf. Amazing that with the real estate depression in the USA you can find condos selling at that price per square footage even in South Florida. Congrats to the Philippines for being able to attract buyer willing to pay this much here.

  5. says

    Hi AussieLee- Yes, I agree that the ability to actually own one is one of the things that attracts foreigners to the condos. Most of these units have garden areas and such too, so that might meet your desire for some "outside" area. I think that for the local purchasers of such units you would be looking at upper-middle class people and up.

  6. says

    Hi rick b- Yeah, these units would not be for me either. Firstly, my family is too big to live in such a place, and also I don't think something like this is the right investment at this time.

  7. says

    Hi Paul- Very interesting. I had not heard about bankrupt condo developments. It is something to watch out for, certainly. Thanks for sharing that info.

  8. says

    Hi richard- I had not considered the per sq. meter price until reading what you wrote. I just checked the sales literature for one of the condo units that I looked at this past weekend, and they are around P58k/sq. m. Quite a bit! I do think that some nice money is being made by somebody on this! :shock:

  9. says

    Hi Bob, thank you for this article. If your readers are interested, just link to my name, or go to the Linmarr website directly at:
    http://www.linmarrtowers.com/

    I will also try to answer direct questions about the project. If I can't then I will try to find the answers for them.

    Cheers,
    Ellen

  10. Larry says

    Maayon Buntag Bob
    I like the idea of a condo but keep running into the issue of room. You know you have the Philippine guest that stay for a couple months and your American friends that would like to stay over. Also you have the niece or nephew that needs a place to stay in the city. Still the biggest issue is the dirty kitchen. My wife cannot live without a dirty kitchen. Here in South Dakota my wife has a used Jen-Air range with 10ft of countertop and sink in the garage. But the dirty kitchen was my idea since I do not like the smell of the cooking fish.

  11. richard says

    Another thing to consider and be aware of is when you buy a condo space in the philippines they generally consider any outside space such as a balcony as part of the total sqm they quote you. So for example, a unit of say 110sqm may only have 90sqm of it inside so the unit is actually smaller than you might think.

  12. says

    Hi Larry- Wow, that was a good idea for a dirty kitchen in the States. Honestly, you are the only person I ever heard of to have a dirty kitchen there! It's a great idea, though, especially when it comes to the bulad! :lol:

  13. says

    Hi richard- I am looking at the sales brochure for such a unit right now. On this particular one, they don't include balcony space in the SQM calculations. They show it as a separate space calculation. Most of these units are small, though, ranging from about 22 to 49 sqm.

  14. JohnM says

    Bob:

    We considered a high-rise condo in Manila before choosing our house. Rebecca was totally against the idea for two reasons:

    1. She had memories of older high-rise condos with only one elevator that was continuously "offline".
    2. Electrical fires are a big problem in the Philippines. Many condos (I'm not necessarily referring to Ellen's project… Those seem pretty nice) are built as quickly and cheaply as possible here, with very low prices targeting OFWs. The fear of shoddy wiring and fire terrifies her.

  15. says

    Hi JohnM- I can certainly understand Rebecca's concern when it comes to faulty wiring. It that still common in newer units, though? It seems that we rarely hear of such problems on the news these days.

  16. Larry says

    Bob
    I also find myself using the dirty kitchen for grilling steaks and bratwurst. But my wife is the only Filipina here that I know of that has a dirty kitchen. I have had others looking a t the kitchen since they also do not like the smell of the cooking fish. Buho!

  17. JohnM says

    Bob:

    I think most new units are fine nowadays, but fears can sometimes be irrational. Since we would live there, I wanted her to feel like "home", and it would have made a difficult move more difficult if we went to a high-rise.

    (BTW— I think the fire risk in our 20 year-old house is probably much higher, but she views it as easier "escape" in a fire— I'm not so sure)

  18. says

    Hi JohnM- I agree that we are all human, and our fears are not always rational. I can see why she would feel that it's easier to escape a one or two level house compared to a 20 floor high rise!

  19. brian says

    I was under the impression that verticle development was restrained to 5 stories due to Davao being on or close to a fault line.

  20. says

    Hi brian- I had never heard of that before. I do know that Marco Polo Hotel is either 17 or 18 stories, and Landco Building is about the same height (I think it is one floor less than Marco Polo). Perhaps they were able to negotiate a waiver or something. Come to think of it, Royal Mandaya Hotel and Apo View are both significantly taller than that too. I think that Apo View is 13 floors or so.

  21. Jason says

    Multiple condo units are going to start big time in the coming years. My wife and I are planning to buy some land and to actually build some condos. We will rent them out though. I want my own house and to have "Peace and Quiet". Do you know if these condo units are filipino owned or foreign owned? It's probably the only thing that im confused about when it comes to their ownership laws in the Philippines!

    PS: I writing something for you Bob…just take more time I had a car accident this Sunday, hehe. Have a great day all :)

  22. says

    Hi Jason- Foreigners cannot legally own real estate in the Philippines, so the condo developments must be Filipino owned. Foreigners can own up to a maximum of 40% of the condo units in a development.

  23. says

    Hi bob- just to chime in. i also know of height restrictions in davao, though i do not know the limit. this is why marco polo surprised me when i heard of it's development. also, this was a few years back & may have been amended.

    i'm naturally hesitant of first generation products or designs, but these condos have piqued my interest. i am a condo owner here in california & enjoy the small scale lifestyle quite a bit. i'd love to hear more updates about this.

  24. says

    Hi macky- Interesting, I had never heard of the height restriction. Certainly a place like Tokyo is very earthquake prone, yet they build with methods that limit such problems.

    Mostly, I would not consider these first generation designs. After all, most of the players are big companies who have been heavily involved in such condo units in Manila for many years.

  25. Gary says

    Very interesting – Davao is increasingly progressive.

    Thanks for adding the author's picture at the top of the articles Bob :)

  26. says

    Hi Gary- Happy to add the author image! Actually, it is something I was wanting to do, but had to figure out how to do it. You just gave me a little nudge, and when I played with it, I found that it was actually pretty simple!

  27. says

    Hi Bob, there is an easing of requirements for a 5 storey building. I think it has something to do with the amount of steel posts to put in. Hence, 5 is the magic number. Soil testing must be done first – that is the requirement. If the test shows it is okay to build a 5 storey building with the minimum amount of steel posts, then most will opt for 5 storeys. Hope this helps.

  28. Sean says

    I made my first trip to Davao last weekend on my way back home to Manila after spending a couple of days at the Pearl Farm resort with my company. I was only in Davao for a few hours, but liked the general feeling about the place and especially the lack of high rise buildings that I am continously surrounded by in Manila.

    However I definitely agree with BrSpiritus, give me some land on Samal anytime to setup my home for a nice relaxing time.

  29. Graham says

    Hi Bob

    Have not posted for awhile here, but drop in sometimes

    What suprizes me about the condos being built is that they are quiet small! I viewed the Ecoland 4000.
    Also the prices seem a bit steep heading towards Manila prices. Also
    i have a feeling that some projects wont sell so well now we are knee deep
    in the credit crunch which im sure will have some effect here in Davao and in
    the Philippines as a whole. I notice OFWs remitence fell back last month.

    Alot of the people buying the Condos are OFWs if or when
    they might start losing their jobs overseas or become tight with their money i think the condo market may collapse before it takes off, which would be a shame becuase would also like to buy as it appeals to me that you can actually own it being a foreigner but at the moment im waiting and watching no rush.

    As i said previous i think the global recession will have a knock on effect, in fact it already has here in Davao as i understand SM have now put on hold the building of SM in Lanang.

    So im not in a rush to buy anything right now here. Like to hear other people's views how or if the global recession will effect the Philippines and Davao

  30. says

    Hi Sean- Certainly I agree with you, that is why Feyma and I have about 1,000 square meters on Samal and will be building our house there!

  31. says

    Hi Graham- I would tend to agree that the credit crunch will hit Davao at some point, but I don't think so yet. I have not heard anything about SM stopping their plans to build in Lanang, as a matter of fact, I passed by there the other day, and work was being done on the site when I passed by.

    If things do drop out, it could lead to some real nice prices on the condo units that are already underway.

  32. Graham says

    I think people are cutting back here especially with the higher gas prices although oil prices are now falling back, i have noticed too alot of Big SUVs sudenly for sale in Davao don't know if anyone else has noticed? I think the writing is on the wall when OFWs remitence starts falling im afraid to say…

  33. Graham says

    This is an interesting article re world recession and mention the Philippines http://www.metimes.com/Security/2008/10/20/walker

    There will be parts of the world that do very badly indeed, probably starting with those that rely on large remittances from its citizens working in richer countries abroad. This will hurt Pakistan and Bangladesh, the Philippines, Central America, North Africa and Eastern Europe.
    ========

    sorry about the doom and gloom but i think Condos could well turn out not to be a good investment for a while especially when most are being bought by OFWs, Thats the reason why im not buying yet!

  34. says

    Hi Graham- Definitely true about the SUVs, I have seen the same myself. When it comes to the economic crisis, there is one thing that could actual help the Philippines profit from it – companies all over the world are downscaling staff, and there is some evidence that call center operations in the Philippines could well pick up a lot of extra business to compensate for these downsized staff levels in the first world. We'll have to wait and see.

  35. says

    Hi Graham- I must say, that article at "metimes" is quite interesting. It certainly doesn't paint a pretty picture. However, we are sailing in uncharted waters right now, and it's not possible for anybody out there to know exactly where the ship will sail. Personally, I am confident, even somewhat bullish on the Philippine economy right now. I know that this is a contrary opinion, and I am not exactly sure why I feel this way, but I have a feeling that the Philippines is going to fare better than expected. I hope so at least!

  36. says

    I can not help but smile when Larry mention about "dirty kitchen." He said buho, did he meant baho or mabaho ( stinky). The bagoong certainly smells during cooking so a dirty kitchen is a must, if you like bagoong. Although, I grow up in the Philippines, I really did not like bagoong. If you live in an apartment building, the best way to make enemies, is to cook bagoong in your apartment.
    I also heard from my sister-in-law that condo units are selling well in Manila in spite of the recession. here in US. I agree with you that this times, condo purchases are not good investment.

  37. says

    Hi David B Katague- I'm pretty sure he meant "baho" – don't you think? Instead of bagoong, I think that Larry was talking about bulad, but it is a tight race to decide which smells the worst! :lol:

  38. Gerry says

    Hi Bob! Am now here in LA but still has properties in the Davao area. I just discovered you blog site and found it very interesting and informative specially the condo and mall dev't discussion you have… keep up the good work and will put in my 2 cents and questions soon.

  39. says

    Thanks Bob, and sorry Rusty, I'll try very hard to put my 2cents where it belongs!! Does Ellen have a Real Estate Licence? I'll let Nori know about her.. SF Filipino news paper is saying many of the OFW's Nurses are cashing in on property in Manila because of the prices have come down in many Condo's and especially taking advantage of the peso exchange!! Where are they building a SM in Lanang? Nori says that there is a Robinson being built in Lanang…
    Anyone thats looking for a 860 sq meter lot with a nice house and a BIG Wet kitchen check out my new web site.. .http://www.ed.unboxyourself.com
    Have a Great week everyone, the Stock market went crazy yesturday here in the US!! O'Bie

  40. says

    Hi Ed O’Brien (O’Bie)- Thanks for your comment. Ellen is not a Real Estate Agent, so I doubt that she has a real estate license. Her family is involved in Real Estate Development, among other businesses.

    By the way, regarding your house for sale – it's ok to include a link to your site by putting a link with your name when you sign up to comment. However, please no blatant advertising in the comment itself. If you want to advertise on the site, we can sell you advertising. Otherwise, the comments are not a place for advertising. I hope you understand. As I said, a link from your name is no problem at all.

    Take care!

  41. hill roberts says

    Maayong buntag, Bob. The word, "condo" sounds rather posh to me. Generally speaking, in Spain, majority of the people live in apartment blocks. I, for one, live in one 9with uniterrupted views of North Africa and Gibraltar, as well as the Med. However, I just couldn't find myself to say, "oh, yeah, I live in a condo…"Why? In Europe it's a common thing, especially in Mediterranean countries. However, if you have British friends, they sort of "look down (?)" if they found out we "only" live in an apartment block. Although the word "condo" is widely used in the US and the Philippines, my husband especially would say, " We live in a penthouse…" Indeed we do since we're on the top floor of a five-storey building, with two swimming pools, large and a children's pool and a rather large well-kept garden. still, when I speak to my Fil-Am friends they always refer to "condo"—What's the difference then? I would like to know exactly. Some would say a "condo" has 24 security, unlike apartment blocks. But, in the eighties, we did have a porter-cum-security—but would that qualify as a "condo"? I mentioned the UK because in the past, when one lives in an "apartment block", they usually refer to people who are rather "downmarket" or "long-time" immigrants. Since all our British friends live in the north, they all live in large houses or bungalows. So when they come to Marbella, which is a resort town, they begin to understand why we are, in fact, "flat dwellers" as the Brits would snobbishly say. So, Bob, should I beat my breast and say, "Yehey, I have been living in a "condo" for the past 28 years!" since it's quite a big thing in Florida and the Philippines nowadays…The real reason why we refuse to leave where we are now is in fact, for practical reasons: near centre of town, handy for buying daily paper, restaurants and coffee shops below, gym, accessibility to the nearest health centre and USP hospital is just a few meters from our "penthouse". Above all, because we are childless so no need of a fancy large house on the hills—where celebrities and filty rich live. The "poorer ones live down the valleys and somewhere pretentiously hilly. The new apartment blocks built in major cities here look inviting, but when you actually buy a unit, they are really , really small. They call them "minipiso" and the usual unit is only about 20 square meters!!! The cost before the credit crunch? 100,000 Euros for a teeny-weeny size "condo" unit. Barcelona's elite live up on the hills, the rest live in apartment blocks. Indeed, they are 99% flat dwellers and proud of it. Regards. Hill

  42. hill roberts says

    Bob –corection> The swimming pools are for all owners of the apartment building—NOT exclusive for our use—hehehe. Mind you we do not even swim!The garden too is for everybody.

  43. hill roberts says

    Hi, Bob, many thanks for clarifying that one. I'll let my British friends in northern England know about it….so they do not look down on us, being real "flat dwellers". Our apartment block is one of the old originals built in Marbella when there was hardly any building in sight or on site! Also, the new ones being built or those that have been built these last twenty years are only nice to look at. But if you do buy one, chances are, you'd have to transport all your furniture via the
    balcony since it's the only way to do it!

  44. AlexB says

    Hi Bob,

    Interesting article. I’m not sure what to say about condos in the Philippines. Although I own one and good place to just stay or use as a pied a terre, it just doesn’t feel the same as condo living in Toronto (or North America). I’m still looking for terra firma in the Philippines.

    Alex

  45. Alan Cline says

    Lots of condo and other high rise construction going on in Northern Mindanao area of Cagayan de Oro as well . I see water issues here as city water supply is already a big problem . I would think pumping water several stories up will simply make the problem worse ? Wondering if that might be an issue in Davao either now or in the future ?

    • MindanaoBob says

      Hi Alan – Been a while.. nice to hear from you. I have not heard of any such problems in Davao. As far as I know, the water supply here is adequate, perhaps plentiful.

  46. says

    Hi celso lee – The truth is that I never really go to Metro Manila. It's been 5 years since I have been up there. Because of this, I know nothing about condos up there.

  47. says

    Hi hill roberts – in the US, the word "condo" has no connotation of being for the rich or well to do. It simply is an arrangement of how the purchase/ownership is set up. Even a practical slum could be a condo if that is how the legalities of the building are arranged.

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