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Dealing with my family’s finances during the pandemic

Photo by Josh Appel on Unsplash Growing up, I considered myself poor. Although we had a roof over our heads, three meals a day, and enough clothes to get by, we could not pay the mortgage, and our school tuition payments were always late. There was also a time when my parents had no jobs, my father had to settle for direct selling. We were one of those in an endless cycle of debt, where the only way to pay one is to borrow from another. My parents were stuck in this habit even after all of us children graduated and had jobs. When I started having money problems of my own and saw how lacking my financial education was, I tried learning how to manage my income. I was lucky enough to have friends who shared their self-help books and taught me some of the basics of saving and investing. But passing this knowledge on to my parents was another mountain to climb, especially when they thought it was none of my business. So started this mission to convince them---it was the only way to protect
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Do foreign buyers cause rising property prices?

Real estate price increase

A house was recently listed for sale in our neighborhood in Davao City and it was a whopping 4 million Philippine pesos! For a small bungalow that was built in the 80s and a lot size of only about 160 square meters, that was clearly overpriced. No, I am not an appraiser, but I know the basics and have an idea about the current selling prices here. When trying to estimate that property’s value, it should only amount to around Php 2.5 million.

Then someone had prospect buyers who were Filipinos living in the United States. When I told one agent about the overpricing, he just said, “Sige lang, taga-gawas bitaw.” (That’s okay, they’re from abroad anyway.) Because they’re from abroad…

That reminded me of a viral Twitter post about foreigners, particularly Chinese, offering to pay 2-3 times the current rent in Manila, which, of course, the landlords liked. On the other hand, the locals who cannot afford the increased prices would most likely look for cheaper or farther locations.

Link to the Twitter thread:

Apparently, the same thing has happened in Australia and New Zealand, with the latter actually banning foreigners from buying homes in 2018. According to an article by the Telegraph, “there have been many anecdotal stories of wealthy foreigners from Silicon Valley and beyond buying ranches in picturesque rural New Zealand as an escape option from a turbulent world. There have also been stories of wealthy Chinese buyers outbidding New Zealanders on suburban homes in the main city of Auckland.” Let’s hope this does not become rampant in the Philippines.

What if the house in our neighborhood sold for 4 million because a foreigner can afford it? Future property sellers may follow this causing a premature price hike. It would be harder then for the locals to purchase a home.

P.S. Two months later, the house’s price went down to 3 million, and again to 2.8 million, which is closer to my estimate.

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