Buying a New Condo Off the Plan
In recent years, the condo development industry is absolutely booming in Manila. We have the biggest names in business competing to build the next beautiful village of apartments. From SM Residences to Ayala, add in DCMI to the mix and we have three biggest players in the market place. With the speed these condo towers and blocks are constructed, the interest in buying new homes ‘off the plan’ is growing and being fulfilled increasingly each year.
Buying off the plan means that you are buying a new condo/townhouse/home that has not yet been constructed. The ‘plans’ for the construction has been completed and (hopefully) approved by the local government department, but there is no physical building yet. You are therefore buying the home after seeing the plans and maybe a display unit only.
Like and real estate transaction, there are always positives and negatives to every situation when buying a new home or investment property. Is buying a condo off the plan the right thing for your situation? Here are some questions to consider and help you with the process.
- Is the builder you are buying the property from a reputable one? Have they built and delivered the same size projects in the past? In other words; “are you confident that they will deliver the final product?”.
- Are you able to wait until the completion date for your new home? Please note, consider if the project is delayed by 6 months, will you still be able to wait? If any delay in the construction cause you stress or other problems, maybe buying an existing property is a better idea. Delays may not be the fault even of the builder, consider the possibility of typhoon damage, flooding, or material delays from a supplier.
- Is buying a complete building going to stress your finances and budget? Often, buying a condo off the plan is cheaper in the short term.
- Do you meet the finance providers requirements for buying off the plan? This may be the developer or the partner bank who is lending the money to finance the purchase.
One of the biggest advantages to buying a condo off the plan is this; assuming that the real estate market in Manila remains stable and continues to grow in value (no guarantees of this anywhere in the world!), you are likely playing ‘this years prices’ for ‘next years condos’. As we know generally, the value of a property increases overtime. Therefore, purchasing a condo off the plan allows you to secure a property at the current market value. When the project is complete maybe in 1-3 years time, the average price for a similar condo in the same area should have increased.
There is no guarantee that can be made with property prices and investment advice. Always remember, if there was a guaranteed way to increase the value of your investment and become rich…. everyone would be rich today.
To view some condos that are available for ‘off the plan’ purchase visit these links of major developers in the Philippines: