Land / house prices

If that’s the new building across Lantaw, it’s a bit hard to miss really. Likely cause you’ve been looking at the port, where it’s not located. Go to where Lab-as is, corner of EJ Blanco.

 

My take on the property market in the Dumaguete area:
1. First of all, this country lacks proper zoning regulations and/or the enforcement of such regulations. This means anyone who owns a bit of land anywhere can build a house there.
As a result, many (former) farmers in the area think their farm land is worth a load of money; they just need to subdivide and find buyers and they'll end up rich (which is probably why so much good farm land is laying idle). There's no LGU or state agency stopping anyone with a plan to build a house on farmland. Given that the population density in this country is about the same as in my country of origin, that seems like a strange way to go about building restrictions, especially since quite a bit of land here is mountainous and unsuited for farming.
Of course some buyers and sellers don't understand how the market works, which means you'll find sellers asking 2.5k or more per sqm out in the middle of nowhere. Likewise you'll see buyers who don't get that while the going price for a lot say 5 km inland from Bacong may be around 1.2k per sqm, you'll pay a fair bit more if you search within 2 km from downtown Dumaguete.
2. Yes the number of foreigners in the area (I read somewhere it's around 7,000) obviously has an impact on the local economy -money we spend means income for someone else-, and we also influence the real estate market somewhat. However, the impact on the real estate market is not very big I think; many foreigners either can't afford to buy or don't want to because the land will not be in their name.
In the rental market the impact is a bit bigger I think, and that has indirect effect on the real estate market obviously.
3. Don't underestimate the number of well-to-do Filipino's, whether it's well educated Filipino's living abroad looking to buy or build a nice retirement home or local business owners. Yes many people are still poor, but not all.
4. When trying to get a feel for price levels in the market or even for a single house (is it cheap or expensive) it is generally helpful to consider what monthly rent that property might realistically fetch.
If (in the Philippines) that rent represents an 8% return per year or better on the buying price, I would consider it cheap. If below 6% it's expensive.
So, for example, buying a house for 4.5M (including transfer costs) that you could rent out for maybe 15k a month (4% return) is -economically- a bad idea, whether or not you intend to live there yourself.
5. As for the current state of the market in the Dumaguete area, it will not look the same to everyone, if you're used to land/house prices in urban Europe or America then at first glance Dumaguete is still dirt cheap.
If looking from the perspective of a person from rural Canada or USA then Dumaguete must seem awfully expensive.
I would encourage everyone to forget about such comparisons.
That being said, prices have been rising pretty fast for the past few years in Dumaguete. Whether there's going to be anything like a serious price correction on the horizon remains to be seen, I am not convinced.
On the other hand, some asking prices are indeed way above what one would reasonably expect to pay. In some cases a buyer might be able to negotiate a much fairer price, in other cases the seller might not be really interested to sell.

 

Schools ? Hospitals ? Shopping ? maybe there is a reason it is so inexpensive ... LOL

 

Schools are there. Two shopping centers/malls are under construction. There is a new ACE hospital besides some more hospitals.

A good calculation of a property value is to divide its price including all taxes, fees and so on by 600 (50 years x 12 months) to see the cost per month just to own it. This counts especially for condos. Ex a house and lot costing 6 mio PHP will result in 10k PHP per month just by owning it. Then you need money for maintenance, taxes, fees and repairs.
Probably the rent of a house can be cheaper than owning it.

 

We drove to Bayawan to eval a move there... for the reasons some of you posted here. Was very underwhelmed by the quality of the roads, the unfinished mall and the new Ace Hospital which I believe was converted from a hotel ? This town offers far less than Dumaguete hence the reduced land prices but not sufficient reason for us to relocate.
Sorry for the previous post as sometimes I am too flippant for my own good

 

The ACE was indeed first a bus terminal (!) turned into a hotel and was then becoming the hospital. And the quality of hospital services are more important than how a hospital looks like.
Two unfinished malls are not very appealing but at least the build up is going on. And what I have seen that the city looks very clean on pics. Check the city when the malls are finished.

 

I think there are other factors involved - some of which are down to luck! Firstly, we need to think about the loss of potential income from that Php6 million (in this example) - that depends on interest rates where it is invested OR anything else you could have invested in and that makes it impossible to give an exact figure, but at 3% p.a. it means a 'loss' of Php15,000 per month. Then there is the effect of inflation in general (decreasing the spending value of your return from investing the Php6 million) and in property values in particular (possibly increasing the value of your Php6 million). Also, residual value: as you say, the 50 year rule applies especially to condos, but other property will have some value after 50 years, not least in the lot itself which, without a catastrophic occurrence, should be worth something (and probably in excess of the original Php6 million).

So renting v buying (a common theme on the forum) comes down principally to how people feel about having something that is theirs and then their beneficiaries and about the possible security it gives them. The long-term loss due to renting something which returns no value is an issue but the outcome cannot be determined with certainty, especially when living in a foreign country that provides no long-term citizenship security.