Today’s City Overview is of Cebu City. For many years, Cebu City has been a favorite destination for expats wanting to live in the Philippines. These days, it is perhaps a little less in favor, due to it’s rapid growth. Growth can bring new problems (overcrowding, pollution, traffic, etc) to a City, and a lot of foreigners feel that at this time Cebu City is facing a lot of these problems. It will be interesting to see how the City deals with the challenges over the coming years.
For today’s look at Cebu City, I talked to a long time friend, Orey Higgens. I’ll just step back and let Orey tell the story.
I first visited Cebu City in 1996. My tenure was intermittent until about 2003.
Foreigner housing is not a clear cut category, and costs more in Urban areas than Rural…In Cebu City probably 80% who live in rented dwellings pay between P10k and 30k plus utilities, etc.
Just about any activity is available in Cebu City, but will have Pinoy “flavor”, some of which Foreigners will think inexpensive but others not. Cost of living is subjective and much discussed. For Americans specifically, I used to say $1500 afforded a comfortable life style but its $2000 now and climbing due to the depreciating US Dollar(some live on much less).
The roads here would be considered substandard in most developed countries, but there are some exceptions. Government offices are ok once one learns the way things are done; don’t expect western organization and “service” and raised voice complaints are generally a regrettable Mistake.
Many foreigners have arrived in Cebu City over the years and frankly there are now soo many that a perspective of inexpensive retirement is diminishing. 40% of the Foreign Community is comprised of Koreans who, as Asians, have less aversion to exceed Gov Laws designed to regulate Aliens in Business and Real Property matters.
Most Foreigners in Cebu City hire Taxi or drive personal vehicles; many more would drive except for the fear & loathing of facing the conditions on a daily basis(I mimic Bob and drive with authority) 🙂
Cable TV is available from several sources and is less expensive than US but with reduced programing.
Bottled water is everywhere and can be delivered to your door; the price range sometimes reveals the quality.
Electrical supply is currently adequate but does go through quantum, relatively minor problems.
Personal Safety is not a big issue in Cebu City but when one first arrives listen to established expats and learn as you go and mind your own business….
Thanks Orey for your candid assessment of Cebu City!
when u mention the cost of living is that in a family setting or single setting?
Hi brian – I checked with Orey on that, and he said that the figures that he gives is for a single man with a girlfriend, or a man and wife. No kids there…. Cebu is quite an expensive area.
And the price of a lechon manok?
Hi Bob and to all of you, personal safety is always a big issue. I think everybody has a story to tell about it. You can walk save through life year by year where ever you are in the Philippines. Or, suddenly happened something. I also didn't expect being surrounded by four youngsters near Osmena Circle, when I left the hotel at ten in the morning. I was very sure, "what they wanted to get"! Only my "loud Cebuano/Bisaya words" let them hold on, smile and disappear. – Traffic is getting worst, some people describe Cebu already as 2nd Manila. – Same with the expenses. – Cebu has a lot of nice resorts and beaches but I prefer to stay in Davao after having visit Cebu City and its surroundings several times.
Hi AmericanLola – I am sorry, Orey chose not to answer that question. I felt that in this instance I would not torture it out of him! You know… it's Christmas after all! 😆
Hi Klaus – Yes, I agree with you.
Hi Bob, I like Cebu although I agree its gotten somewhat expensive. Bob do you see Davao going the way of Cebu in a few years? I read above about Koreans and I think the implication was that they are responsible in some ways for higher prices. Could/is the same thing happening there? Its our plan to return to Davao and live-my question would be is in your opinion the cost of basic housing going to rise to Cebu levels over the next few years. I am wondering if I we should purchase a home there now/soon and rent it out until we arrive. I don't want to do that but I don't want time to price us out of the market also. I would appreciate comments from your readers also-your all there you know what is happening in real time-not guessing like I find myself doing. Thanks Bob for your help. This city/area review is great and I am sure others are appreciative also. Ron
Hi Ron LaFleur – When it comes to real estate prices, Davao is really moving up to higher levels already! When we first moved here, finding a place to rent for P5,000 to P7,000 or so was easy! Now, P10,000 is hard to find, and P15,000 is a more common entry point for a home that would be comfortable to a foreigner here. The housing market in Davao is usually tight too, it can be hard to find a decent place to rent. So, in these ways, I feel that Davao is headed in the direction of Cebu City. However, when it comes to goods like food, clothing and such, Davao prices are much lower than what you would find in Cebu or Manila (particularly for food). So, it's a mixed bag, but in terms of real estate, I think we are headed down that same path.
Bob / Ron
Such a lot of the world seems to be going through economic turmoil, some places, more than that, it is no surprise Philippines is included, property stagnation, credit squeeze, cultural instability, and most of all migration of people, my point is……
Philippines is not isolated from these factors and the cost of living (made worse for our US friends by declining $ exchange rates) means these at best are turbulant times. I don't think we can foretell what is going to happen, but change is happening, we must be careful about our choices, i have made mine, (i bought a place in davao 4 years ago) others are making their choices, but to be honest i would not like to advise people about the future. A year or two ago we couldn't see the sub-prime problem, unless we were financial people, today, the ramifications for world economic slowdown may be just emerging
Not trying to be too gloomy here, because there is much room for optimism, but we must also be realistic, things will change
Hi rick b – I would totally agree with you. That's kind of why my response to Ron was more of a "this is how it is now, compared to how it was when I moved here." None of us can predict the future with any degree of accuracy. That being said, I don't see anything wrong with saying "this is what I THINK might happen" as long as it is understood that there are no guarantees.
Bob
Yes, because Ron is asking you a direct question and we can't just say i don't know, like you say, we can only predict
To go back to Rons question about if he should buy now and rent out for the future, this is what i think, and like you say Bob, almost i want to capitalise the think, because its difficult and depends on your age, cash situation, existing commitments etc etc
However, my answer would be, to buy now and rent out, for a hedge against a future move, may be a good practical arrangement and may suit you because you have made a commitment it is all settled, you found somewhere you want to live and have got it sorted, BUT Dave Star and others put the economic case for not doing it, and i agree with him about rental income as a factor of purchase price or house cost, well the figures don't add up, in other words, you won't make money out of it
Buying as a future provision against rising prices, well i just don't think will make economic sense, but it may suit you to do so
sorry, don't think i have helped much but it is a difficult one, good luck
Hi rick b – I do feel that buying a place now, and renting it out in your absence is a fair solution for Ron. The only catch is that managing a property from a distance is always full of problems. But, if you can locate a good property manager here who will be honest and take care of your interests, it is a good solution. Of course, the next question is – will the person who buys the property really end up moving here? A lot of people dream about moving here, and never do it, so this is a legitimate question. Please note, I am not speaking directly of Ron here, but moving out to look at the population as a whole.
2 cents worth: 20+ yrs. I've been make my living doing real estate investment in the USA, houses apartment buildings, as with investing here its my hummble opinion that before you invest anywhere….understand all aspects of the investment, myself when I DO move to the Philippines I would not do ANY investing for a year or two. Stop, look and learn BEFORE you doing ANY investing in real estate. Its better to wish you were in the game than wishing you could get out of it !
Hi brian – Great ideas. I have recommended this many times in the past. Even for people who have been here for vacation in the past, they need to live here for a while first before buying houses or other types of investment. I fully agree with you.
Some good points being made. Indeed, buying to hedge aginst future inflation _is_ a valuable technique, but it's a specialized part of the real estate business. I've lived overseas on government assignments and rented out a home in the US a number of times. results were mixed. It will work if you find a property that you are sure you'll still wnat in the future, if you can find a relaible agent to handle the property in your absence, and if the everything else falls in place. If it goes right it will be a treat if it goes wrong it will be horrid. No one can predict with much certainty.
What many foreigners do to hedge against inflation is buy a condo, or several … before you click on because you don't want to live in a condo, roll the numbers around. You can get a "delivery position" … a promise of a unit for delivery in say, 2 years time, for a very small investment. Pay a tiny (in terms of overall loan value) monthly fee and when the time comes the condo unit is built and ready you can finance the remaininbg amount and rent it out through professional on-site management or sell you right to close the deal to another buyer. I've seen the prices rise nearly 100% during the build-out time, do this a few times and when it comes to make the move you won't need to be in the condo business any more.
The difference that no one seems to be looking at clearly is that it isn't just inflation that drives prices in the Philippines, it's population. The US population is growing at a tiny rate in comparison to the Philippine growth rate … hence many "common knowledge" investment ideas have to be refined to account for the differences.
Hi Dave Starr – Thanks for sharing your ideas.
>> it isn’t just inflation that drives prices in the Philippines, it’s population
the mathematical fact is that the RATE of population increase in the past twenty years in the RP, has gone down!
Hi Alan Mark, you are 100% right. But when I wrote about that topic several years ago in a printed media, I got a lot of "hits" (as in HIT)…
While the rate of population grown may be decreasing…. population is indeed still growing, though.
I have been living here in Cebu for the last year – I have seen the traffic month by month… I opted to purchase my own vehicle… Although it is frustrating, it is still a little fun… and you can cut people off with a smile, because they do the same thing… As far as monthly expenses I can make it by on 50t pesos/month…(that includes a little fun on the weekends) If I really had too I could easily get by on 30t/month. All in all, Cebu really is a great place to live if you are willing to deal with the traffic and pollution, which is just going to get worst.
Hi B Dub – Thanks for stopping by and sharing your experience of living in Cebu! It's always good to get more than one opinion, as we are all different!
Hi Bob,Klaus, Alan, and everyone else!! I have been trying to read through all of this website to gain information on living in the P.. I am a single Female and would like to live in Davao I think. I just read in one of your other sections, that in no way can one own any property in the P… ever, if you don't marry a native. Is that true? I would like to buy a small place but can I? I saw your house Bob, in the "pictures" section, in Daveo I think, that said it was for "Sale"? Can you give me the name of a contact person I can get help from for either renting a place for a year or two or 5, that can also help me in whats for sale. Thanks so much for any help!! Karen
Hi Karen – You will never be able to purchase property in your name. If you marry a local citizen, then he can purchase property for the two of you, but it cannot be in your name.
No, my house is not for sale…. not sure where you saw anything like that. I rent my house here in Davao. We do have a piece of property on Samal Island that we own (in my wife's name), although it is not for sale either.
I have a friend who does Real Estate sales and rentals in Davao. I will have her contact you.
Hi Bob, Thanks for the quick reply! I would love to find a nice rental then, for a year or two. Thanks for any information you can send me on help!! Your site is great! Karen
Hi Karen – Somebody who can help will be in touch with you in the next day or two. Good luck!
bob, could you please have your real estate contact help me with finding a rental property for my son and I? I would appreciate it. thanks Michael
Hi michael severy – I will pass along your name and e-mail to my contact. She works for Davao, though… not sure if you are looking for a place in Cebu City, as this post is about Cebu.