Filipino expatriates prefer the property option

Dubai: The real estate sector may be subject to economic cycles, but its status remains rock steady as the preferred investment choice of Filipino expatriates in the UAE and elsewhere.

Their investment choice takes in condominiums, plots and standalone homes, with average spends being in the region of 4 million pesos (Dh400,000 plus). That's also the reason why the country's property market has thankfully circumvented the kind of turmoil that the US, Western Europe and GCC realty went through.

"Demand is not speculative — investors don't buy property thinking about future profit," said Cheng Rasul, head of the Philippine National Bank for the Middle East. "In the Philippines, many people aim to have a house of their own, so investments are realistic. Filipino workers abroad too are generally risk-averse.

"Many find investments in stocks risky since values may fluctuate. On the other hand, the Philippine real estate is a safe haven."

But not all real estate purchases tend to get the desired results. A. Skrilec, a business woman, pulled out on a deal after finding out that the property could not be modified based on her requirements. "It is important that you get everything in writing before you commit to a deal because some agents will say anything to get your money," she said.

Sourcing home loans from government-backed mortgage providers can also prove cumbersome. "Sometimes my monthly payments are not automatically updated in their system for some reason and I get these notices of non-payment. My next goal is to close this loan so I will have less headaches," Skrilec added.

Then there's the financial obligation that comes with the purchases. Emily Abregana Anaya, who moved from Bahrain to Florida, said she and her husband invested in a 3.5 million peso (Dh294,170) residential property in the Philippines and a 200-square-metre plot which she bought for 350,000 pesos but is now worth 1 million pesos.

"We plan to purchase additional lots," she said.

Strong returns

Her preferred investment mode requires purchasing land directly from the owners instead of the developers since "their prices are overboard and inappropriate to the value of the property that you get. Thus it is smarter for you to build your own home in your own lot."

What is her idea of a good property investment? "It should give you a return of at least 20 per cent." Lito Echevarria, a radio presenter in Dubai, purchased a house and plot that is now worth twice what he price.

"Real estate is the easiest investment option because it doesn't require complex market knowledge, like when you invest in stocks."

Russell Jay Paca, a Dubai-based engineer, saved for a few years to realise the dream of owning a two-storey duplex apartment worth 7 million pesos. He has since gotten a substantial return on investment from the rent on the first apartment. The other unit serves as the Pacas' vacation home.

Real estate is still one of the best investments in the Philippines." It's not just Filipino expatriates who are investing. The realty market attracts a lot of attention from foreign investors. Last month Algemene Pensioen Groep, one of Europe's biggest fund managers, invested 2.25 billion pesos in Century Properties, thus extending a major vote of confidence.

Filipino expatriates want a safe haven or a trophy to show for their years of work in foreign lands. Just look to Google for more proof. Type in "Philippine real estate" and you get more than 75 million results. No place like home.

Ownership: Citizenship paramount

Filipinos residing in the Philippines or abroad but have maintained their Philippines citizenship are entitled to own property in the country. Natural-born Filipinos with dual citizenship also enjoy the same privilege, provided they have not renounced their Philippines citizenship.

Corporations in the Philippines whose capital stock is 60 per cent Filipino-owned may also own non-agricultural private land.

Those entitled to own property under limited conditions include natural-born Philippine citizens who voluntarily opted to acquire foreign citizenship through naturalisation.

Unlike Philippines citizens, former citizens who are natural-born Filipinos are only entitled to own either 5,000 square metres of urban land or 30,000 square metres of rural land in the Philippines for business or other purposes.

Foreign citizens and corporations may also acquire and own condominium units, but the land on which the building stands must be owned by a condominium corporation 60 per cent of which is Filipino-owned.