Philippines: High Yields on Metro Manila Condominiums

The rental income from the rental of residential condominiums in central areas of Metro Manila range from 8% to 15% per year, according to a study by the Global Property Guide only global property guide (www.. Com released). to earn the smallest apartments in each segment, the highest yields. For example, studios in the areas of choice, that Manila can earn around 13% -15%. But the highest returns are for the smallest studios (30 sqm), including a rental yield of about 15 available. 1%. Studio Condo larger (40 sqm) a return of slightly less (12 9%). The same trend in the condominium segment other. One or two bedrooms measure (50-90 sqm) earn about 12% -15%, but the highest yields can be obtained on the small M. (60 sqm) condo, including a rental yield of 15%. Larger 1-2 room flats (80 sqm), a rather low yield (11 5%) received. ”The scheme is unusual,” said Matthew Pollock, publisher of Global Property guide. ” Instead of a smooth running of the units to low, we are still too low to high yield “peaks” or “Songs” including housing sizes – which correspond to the smallest species of a certain number of rooms. “Investing more Interest rates in the Philippines are at historic lows, as this condo attractive returns. Currently 364-day Treasury bill yield of less than 3 82%, while the interest rates on term deposits of one year, around first 5% – 2% per year. A deposit of five years amounts to only 5% per year, and a 5-year T-Bond Wins 5th 68%. Demand for residential condominiums in Metro Manila has been boosted by the strong economic growth, especially the rapid growth of the Business Process Outsourcing companies including call centers. Call center agents are a new generation of young urban professionals enormous purchasing power. As most call center agents work at night, they have condos that are close to her workplace. ”The lesson is clear – to win a lot of money, buy a small device in the commercial district of Metro Manila, with very small rooms. The performance is significantly better than in most Asian cities,” said Pollock. The growth of the condo was also the fact that they are free of registration and title of real estate valuation issues that dogs have helped in common land ownership in the Philippines. Foreigners are allowed to acquire condo units, as the foreign party can not exceed 40% of the building. There is no rent control for units with monthly rent of more than P10, 000 (U.S. $ 208). Below this level, the rent control law limits rent increases to 10% annually. Significant expansion of the mortgage market has recently started in the Philippines. The banks are willing to loan up to 70% of the purchase price. variable-rate mortgages are at rates of 9% to 9 available. 99% of loans at fixed interest rate of 5 + years cost 1% – 1 5% more. Overtaxation Potential investors should be cautious, very high taxes and fees they may have to pay for their condos. For example, the VAT of 12% applies to units with monthly rents of more than 10 thousand pesos per month ($ 208). The rental income from abroad, foreigners are charged a withholding tax of 25%. Inhabitants, on the other hand, 5% withholding tax charged ineligible. Round-trip purchase and sale of real estate transactions costs can be up to 35% of the sale, because numerous taxes and levies such as VAT (12%), gains (6% silent) all of the real estate industry high Agents (5%), and other charges. # # # Economics Team: Prince Christian Cruz, Senior Economist Phone: (+632) 750 0560 Mobile: (+63) 917 735 2228 Fax: (+632) 325 0642 Email: @ global property guide prince. comPublisher and Publisher: Matthew Montagu-Pollock Phone: (+632) 867 4220 Mobile: (+63) 7073 917 321 Fax: (+632) 325 0642 Email: @ global property guide editor. comAddress: Global Property Guide 5F Electra House Building 115-117, Esteban St. Legaspi Village, Makati City Philippines in 1229 info @ global property guide. com

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