All posts for the month March, 2014

Q&AQuestion: I’m Filipino Canadian living in Toronto for almost 25 years now. I am thinking of owning an investment property and would like to ask you your opinion in investing in other country like in the Philippines. I’m more interested in the advantage and disadvantages answer. – Olivia Chavez

Answer: Your question is very subjective topic therefore I will try my best to answer it with my own personal opinion.

While it is true that many Filipino/Canadian nowadays turn to their native country the Philippines for investment purposes their primary reason for doing so is retirement purposes.

Here’s why…globalization allows the world to be globally connected which translates to more jobs going overseas. More and more jobs now such as IT, call centres and data processing are now being outsource to other countries and the Philippines are among the countries of favorites next to Mexico and India. Why? because of their ability to speak the English language – the second language spoken in the Philippines is English.

Investing in foreign countries can sometimes be a bit challenging if you have never done it before and if you don’t know the area or location specially if you have been away from the country and have never been back in the country in a while.

The Philippines GDP (Gross Domestic Product) is very complex in itself some analyst says they are in the bubble some say they are a rising tiger in asia but real estate sector plays a major role in the Philippine economy. The Philippines are amongst the asian countries with the robust solid GDP last year of 2013 hitting 7.5% GDP compare to Canada of 2.5% GDP. So in theory the Philippine economy outpaced economic China and neighboring country in Asia, Europe and North America.

Almost 80-90% of people who invested in Philippine real estate are OFW’s (overseas foreign workers) or foreigners. And this trend will continue to rise due to the currency power of CDN dollar over PESO. The cheaper labor gets the more job growth other country will create and more people will spend.

On the flip side of the coin there are more skilled professionals from the Philippines (nurses, doctors, engineers, IT professionals, finance) now going overseas for better opportunity and higher pay which again translates to money flowing back to the country which is why remittance is a billion dollar industry in the Philippines.

Now should you or should you not invest in real estate the Philippines?


  • Affordable Real Estate Property: Real Estate in the Philippines are still far more cheaper than any real estate in Asia and in some cases they have developed far more advance engineering architecture design compare to real estate in north america. Some real estate developers partner with celebrities and icons to develop and promote their real estate projects.
  • Currency Power: With the exchange rate dollar against peso of $1 = P41 it is easier to own a lucrative piece of real estate property. I can use the same analogy of China and India 20 years ago when they were dirt poor and their economy is not in the radar economic power, owning a piece of real estate back then is affordable compare to now.
  • Retirement Home: More and more Filipinos nowadays turn to their native country for retirement rather than to stay in retirement home here in north america. It is way far more cheaper to stay in the Philippines than to stay in retirement home here and your RRSP savings will last longer. The best part is you can escape the winter cold.
  • Vacation Home: Privacy is an issue when going for vacation because of close tight knit family culture. It is hard to go places without having to bring the whole family with you. So owning your own property eliminate this problem.
  • Rental Income: You can own a piece of real estate property in a desirable area such as downtown manila and have it rented it out while you are in abroad and the developer will look after it for you for a fee.
  • Flexible Payment: Developers offer a very affordable monthly installment payment scheme some cost as little as if you were to finance a vehicle.


  • Trust Issue: Problems with developers. Project never finish on time and some other developer vanished. So it is very important to do a thorough research of the background and credibility of the developers before shelling out your own money. Also, dealing with Filipino company can be a bit dicey they are often sometimes slow and some operate in totalitarian rules that were not use to in North America.
  • Reselability: It can be difficult to resale your property locally if it is worth million of peso. While this is true always remember that majority of real estate investor are from overseas and they look for branded name in real estate projects. Why? Because this gives credibility and investor are more likely to trust a company that have names of celebrities such as Paris Hilton and  Donald Trump on real estate projects and also it holds its value compare to others that depreciate its value overtime.
  • Owning Inexpensive Property: We all know that real estate is always about location location location and you may argue why own an expensive real estate? Well…the best location for real estate property with high ROI yield is mostly situated within the vicinity of business district where it can be easily be rented out. Remote location or seasonal resorts destination can be lucrative only if you have somebody who can maintain it locally while you are abroad. Asking family members to look after investment property is usually not a good idea and can create family fewd down the road. It is also hard to resell.
  • Financing: Mortgage financing has an age limit up to 65 years old. So if you are a 60 year old buyer trying to own a real estate property your monthly payment maybe a little stiff.
  • Third Party Currency: Some developers uses a scheme of third party currency meaning their corporate banking account are not in the Philippines but it can be somewhere in Europe. I’m not sure of the reason why but all I can think of is to hide their asset from the Philippine government. Why is this important? Because you can’t take advantage of the Canadian currency power if there is a stronger middle European currency before it gets converted to peso.
  • Money Tied In Overseas: If you are living abroad you have to find a ways to bring your money from the proceeds back to Canada without having to pay taxes. Also, keep in mind you have to declare an overseas property in Canada if you own a property overseas worth over $100K.

Having to sold high end real estate projects in the Philippines from overseas I had the opportunity to get an insight of it and although I recommend it to those people that has a disposable income I would only recommend it if you are a savvy investor that are not planning on making quick profit by flipping their property for living.

Another ways of looking at it from Canadian investor point of view is if you are an investor who invest in stocks, dividends, mutual funds etc. these investments only generates a 2 – 3% annual rate of return if you are lucky whereas the Philippine real estate are averaging a very conservative 10% – 25% return on investment annually. So if you are a Filipino banking on RRSP as your retirement income still the Philippine real estate looks far more lucrative.

Canadian real estate is very expensive and not a lot of people can afford to own a secondary investment home. For $100K anybody can own a high end lucrative piece of real estate in the downtown capital Manila that is home to westernized Filipino and within the business district.

Although investing in Philippine real estate property can give a significant return on investment just like any other investment it has a major advantages and disadvantages too so make sure to ask question and seek a professional independent advice from knowledgeable expert who can relate in North American real estate and Philippine real estate. Most importantly somebody who have done it before and not just somebody employed by the company.

Should you have more question about Philippine real estate you can visit me on

Q&AQuestion (Filipino): Hello Alex, nakita ko ang profile mo sa google when I’m searching for Filipino real estate agent dito sa Toronto. May tanong lang ako….bago lang kami kasi dito sa Canada galing pnas. We’re skilled professional Engineer and Nurse relocated dito sa Toronto at plano namin na makabili na ng sarili naming bahay after 2 years hopefully. Ano ang kailangan naming gawin and the fastest way to realize our dream? – Mildred & Francisco Ramirez

Translation (English): We found your profile on google search while searching for Filipino real estate agent here in Toronto Canada. We are skilled professionals with Engineering and Nursing background newcomers recently relocated from the Philippines. We are planning to buy our own home in the next 2 years hopefully. What is the fastest way to make our dreams come true?

Answer: The fastest way for newcomers to acquire a mortgage to own a home in Canada is to first develop your credit history. Bank uses credit report history as one of the requirements for validation of your credit worthiness. Banks or lending institution will want to make sure you are capable of shouldering your mortgage obligation by paying off your mortgage monthly payment on time.

There are few simple ways to build a credit report.

Start using your credit: Open one or two credit cards, maximum of two credit card and use it daily on your day to day purchase such as gas, grocery and/or other errands and make sure you pay the credit card on time every time. Financial institution updates credit reporting agency such as equifax every month so make sure you are paying your credit card every 20 days from your purchase. It is okay to get charge small interest by credit card company as long as you develop your credit history. Another way of building your credit report is to make large amount purchases from a store once in a while such as high end TV and return the item after 20 days. Doing so will show on the report that you are paying off your credit card bill on time and what you are aiming for in your report is a beacon score minimum of 680+.

Invest on RRSP: The easiest way to acquire a down payment for your first home is to contribute to RRSP. Why? Because if you have a job and if you let your employer to automatically deduct a portion of your salary to be contributed to (Retirement Savings Plan) you will not see this money and therefore you will not miss it and on the plus side it will force you to save.

Another advantage of contributing through RRSP is you can “barrow” against your RRSP and use it as a down payment tax free. It also offset your annual income putting your income into a lower tax bracket which translate to refunds.

What can you do with your income tax refund? Don’t spend it but reinvested back to your RRSP for the following year for a bigger refund and you do it all over again until you have enough down payment.

Once you accomplished this two steps and you are ready for your home ownership contact Great Real Estate Advice your Filipino real estate agent in Toronto, Scarborough and Markham.

Q&AQuestion: When doing a condo inspection for the purpose of buying the unit, can the home inspector do an inspection of the common elements of the building? – Jane McCan

Answer: Absolutely! It is part of your due diligence to make sure you are getting the value you are paying for. As a buyer I would definitely have the home inspector do an inspection of the basement for potential cracks, signs of previous flooding or sign of previous renovation because this can significantly affect the monthly payment of the condominium association fee or condo dues.

Just because it is a building structure it doesn’t mean that it is always safe. Also keep in mind the older the structure gets the more often it needs to be maintained and it usually translate to frequent increase on the condominium association fees.

Q&AQuestion: What are the implication the new CHMC premium increased to the home market? – Will Wong

Answer: The main purposed for the hike of premiums on CHMC starting on May 1st 2014 by the Federal Agency is to deter home buyers to take on speculative loan they cannot afford.

In my opinion I don’t see much implication in real estate market here is why…the increase will only be a result of $5 – $10 more on the monthly payment on the average mortgage and this will not affect existing home owners.


The premium CMHC charges will go from 2.75% to 3.15%. On a $450,000 mortgage, the fee — it is charged up front and often tacked onto the mortgage, would rise from $12,375 to $14,175.

What will affect the real estate market is the sudden increase of the mortgage interest rates because more people will think twice before entering in the real estate market.

For more article about this new recent changes in CHMC premiums from Financial Post click here