November 6, 2021

Why Condos Are Good Long-Term Investments

By: Melecio Martin G. Arranz IV

The Philippines has one of Southeast Asia’s highest population growth rates, which naturally entails a growing demand for housing. As a result, public and private organizations are constantly building new homes to keep up with demand—single-family houses, apartment buildings, and condos. 

The popularity of condominium units as homes and real estate investments is also rising, thanks to the increasing number of big-ticket infrastructure projects—like the Cavite-Laguna Expressway (CALAX) and Skyway SLEX Extension—that make condo developments much more accessible. So, if there’s a good time to invest in condos for the long term, it’s today.

Do condos appreciate? Is buying a condo a good investment? Let’s answer these questions—and more—by taking a closer look at the condo investment landscape in this blog.

Do Condos Appreciate?

Generally, condos appreciate like any piece of real estate. Several factors influence this trend relating to a condo: its accessibility, build quality, and demand, to name a few. However, its primary driver is its location. Let’s say your condo is in a prime area, like a central business district (CBD). In this case, there’s no doubt that its value will appreciate over time. 

For instance, condo prices increased by 11.1% this year in Laguna, while Cavite properties grew by 12.4%. Likewise, the capital value of Metro Manila condominium units rose by a modest 2.1%.

This appreciation potential doesn’t just attract first-time buyers but also appeals to investors seeking long-term gains. It’s why local professionals, high-net-worth individuals, and families upgrading their lifestyles are often on the lookout for condos located in prime and accessible neighborhoods around the country.

8 Reasons Why Condos Are a Good Long-Term Investment

Investing in a condo offers numerous benefits whether you’re a homebuyer or investor. From value to cost and security, condos can secure these goals for you.

1. They’re located in prime areas

Condos in the metros with easy access to retail establishments, health facilities, leisure spots, transport hubs, and other amenities appreciate faster. Their proximity to such projects make them desirable for modern consumers who are likely your target market. When looking for a condo property, keep an eye on planned or ongoing developments in the area to indicate whether it’s thriving.

2. They don’t require external maintenance and repairs

Maintaining a condo unit is a breeze. The developer’s property management arm handles day-to-day repairs and upkeep of the property’s exteriors and common areas. As such, you can focus on managing your real estate investment, looking for tenants, and growing your property portfolio.

3. They feature 24/7 security

You don’t have to hire caretakers or be alert for vandals or burglars. Besides maintenance and repairs, property management is also responsible for on-premise security. Most developments have round-the-clock guards, CCTV cameras, fire sprinklers, and smoke detectors to keep you or your tenants safe from harm and emergencies.

4. They’re more affordable than house and lots

Condo prices vary depending on location and amenities—some are expensive, others are affordable. Still, they’re generally more affordable than house and lots. Condos’ running expenses are also lower since owners and tenants share upkeep costs. 

You can also expect lower property taxes since you only have to pay for your unit. Meanwhile, property management handles common areas. All these perks make condos a perfect vehicle for real estate investors with limited budgets.

5. Their amenities are a good pull for renters

Pools, gyms, green spaces, and recreational areas—condos offer various amenities your potential occupants may find attractive. On top of those, most properties are also nearby trending establishments like malls, cafes, restaurants, and entertainment. As such, it’s easier for you to attract renters. Even if a tenant moves out, your vacancy is likely short-lived because many people will likely line up to occupy it.

6. They strictly adhere to the Building Code of the Philippines

Condos in the Philippines follow the Building Code’s stringent requirements, ensuring all structures within every development meet safety, health, and environmental standards. In other words, investing in a condo means getting a property that has passed rigorous inspections and follows construction and safety protocols.

This characteristic reduces structural issues in the long run. It also makes ownership more affordable since the Code protects your investment from sudden maintenance costs or legal complications.

7. They’re desirable to different market segments

Recent research shows that younger generations prefer condos because their lock-and-leave lifestyle matches their busy schedules. Condos’ amenities and proximity to offices also appeal to this age group. Meanwhile, empty nesters and retirees value the convenience and security of condo living. Such demand for your unit increases the likelihood of profitable returns for your investment.

8. They’ve been in demand for a long time

Despite recent economic downturns, demand for condos remains strong. In fact, the demand for luxury properties in Metro Manila saw considerable recovery in 2022, with units upwards of PHP 8 million making up 34% of total sales. In comparison, the luxury segment only comprised 5% of the previous year.

What Happens to Your Condo After 50 Years?

Contrary to popular belief, your condo will remain yours after 50 years. Many believe that condo buildings are only good for 50 years, after which they’ll be subject to demolition, but this is a myth.

Indeed, the Condominium Act requires condo buildings to exist for 50 years to be declared uninhabitable and sold. However, it must meet other prerequisites, namely:

• The condo must be obsolete and uneconomical. It’s uninhabitable due to considerable signs of wear and tear, and the area is no longer a prime location due to economic shifts.
• Condo owners oppose any property repairs, restoration, remodeling, or modernizing. 

If your condo ticks these factors, that’s the only time property managers can declare the building uninhabitable and set it up for demolition or sale. In this case, you and fellow unit owners will receive a portion of the sale’s proceeds, meaning you won’t lose ownership without just compensation.

Make the Right Investment with Federal Land

Buying and investing in a condo for sale in the Philippines provides long-term real estate opportunities, considering many prime locations are still developing and the workforce is still young and growing. You only need to do your research before you start. Choose properties with high investment potential and make smart decisions to maximize your returns for the long term.

Don’t miss out on high-quality properties from Federal Land, the leading real estate company in the Philippines. Take our Binondo condo, Four Season Riviera, for example. Its ideal location at the heart of the nation’s capital gives you a better chance of making the most of your investment.

Contact us to learn more.