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A home means more than four walls with a roof. Constructing your first house from the ground up can be a challenge. This is why you need to be prepared for the steps you need to take, and the costs you have to cover.
To help you figure out what to expect when constructing a house in the Philippines, this guide is for you.
Building vs. Buying a House
Who doesn’t love the idea of getting a house built from scratch? This way, you can get everything tailored exactly to your needs and liking.
Despite the obvious allure of constructing your own house, it comes with a disadvantage. When deciding whether you want to build or buy a house, you have to take into consideration its advantages and disadvantages.
Pros of Building a House
You can design it exactly how you want
One of the most enjoyable parts of making your own home is to build it according to your preference. You will decide how many rooms you want, how big the house will be, and even the layout of your kitchen.
You can decide the location
Whether you’ve always wanted to live in the middle of the city, or somewhere quiet, you can build a house anywhere you want.
You’ll deal with less maintenance in the future
One of the most obvious advantages of building your own home is the repairs and maintenance will be very minimal or nonexistent for a few years.
Cons of Building a House
It’s very expensive
Building a house from scratch will cost you more than simply buying a home. Because of this, you need to save more or apply for a bigger loan.
It takes time
Building a house takes a long time. It can take months to plan, get all your permits approved, and construct the house. This means you will have to make living arrangements in the meantime and cover rent expenses.
The planning and construction stages can be very stressful
When you build a house, you need to get many things in order such as the land, construction materials, labor, and furniture, among many others. Managing all these and making sure you’re still on a budget can take a toll on your mental health.
Pros of Buying a House
The turnaround time is lesser
Unlike construction projects that will take months or years to finish, you can immediately move into your newly purchased home as soon as you want to. This makes it the best option for those in a time crunch.
You’ll save money
Purchasing a house instead of constructing one is cheaper and you can haggle more.
You can customize
A lot of people prefer constructing their home instead of buying one because they think it cannot be customized to their liking.
However, that’s not the case. Although you may shell out more money, you can still tailor a bought house to your needs.
Cons of Buying a House
It can take a while to find the right home
Buying a home is an important investment, and it’s not something you should rush. Although you may get lucky and find the perfect home on your first week of searching, chances are, that won’t be the case.
Finding the right house can take months.
You may be dealing with maintenance issues
When you’re buying a secondhand home, you may encounter problems with electricity, or plumbing. You may even deal with major maintenance issues.
You need to make bids
Depending on the house you want to buy, prepare to have competition. This could include a bidding war that will make your expenses climb up unexpectedly.
How much does it cost to build a house in the Philippines?
Your home is one of the biggest investments you will make in your life so it comes as no surprise that it has a hefty price tag. Knowing how much it will cost will allow you to have realistic expectations on how much money you need to have.
Most contractors estimate the expenses using a cost per square meter method, and this depends on the finish you want to prefer.
For instance, a rough finish home with the essentials such as cement floorings, corrugated roofs, jalousie windows, and concrete walls without paint can cost Php20,000 to 23,000 per square meter.
On the other hand, a standard finish that comes with ceramic or granite tiles, painted walls, and windows with aluminum frames can cost Php25,000 to Php30,000 per square meter.
If what you’re after is the high-end finish with an upscale feel which can include accent wall panels, pin lights, coated granite tiles, the cost is between Php35,000 to Php40,000 per square meter.
Keep in mind that these costs only cover the construction. It does not include movable furniture, fencing, and landscaping.
Factors that determine house construction costs
When you’re constructing a house, you should be aware of the complexities that can affect its costs. We’ve rounded up the factors that you need to consider below.
Type of finish
As mentioned in the previous section, the cost of your house depends on the outcome you want to achieve, whether it’s rough finish, standard finish, or high-end finish.
When you are rushing to build your home, expect to shell out more money because you need to hire more workers to meet the deadline.
The location also plays a part in the cost of your home. For instance, if the land is uneven and needs to be filled, that would require more money.
House construction is a very labor-intensive process, and a huge portion of your expenses depends on the labor cost. Generally, the labor cost in major cities like Manila is higher compared to the province.
Ways to Finance Home Construction Projects in the Philippines
SSS offers two types of loans depending on the borrower which are housing loans for OFWs, and housing loans for workers from the private sector.
Loan amount: Php450,000 to Php2,000,000
Loan term: 5 to 30 years, 15 years for OFWs
Interest: 8% to 11%
If you have made contributions with Pag-IBIG for the past two years and do not have existing housing or foreclosed property loans, you are eligible for this loan.
Loan amount: Up to Php6,000,000
Loan term: Up to 20 years, and 15 years of OFWs
Interest: 8% to 11%
Bank Loans (for home construction)
Here are the different home construction bank loans you can apply for.
PS Bank Home Construction Loan
PS Bank is the 2nd largest savings bank in the country. With their home construction loan, renovating or building your home will be possible.
Loan amount: Minimum of Php500,000, maximum of 80% of the project’s appraised value
Loan term: Up to 25 years
Interest: Information not available
Security Bank Home Construction Loan
Established in 1951, Security Bank is one of the most trusted banks in the Philippines. Home construction loans can be approved in as short as 5 banking days.
Loan amount: Up to 80% appraised value of your property
Loan term: Up to 20 years
Interest: starts at 6.25%
Landbank Easy Home Loan
Landbank is owned by the Philippine government. Their Easy Home loan can be used to purchase a property, construct a residential building, or refinance an existing housing loan.
Loan amount: Minimum of Php500,000
Loan term: Up to 20 years
Interest: information not available
Maybank Home Construction Loan
Established in 1960, Maybank offers a wide array of financial services. One of the most popular is their home construction loan.
Loan amount: Minimum of Php1,000,000
Loan term: Up to 30 years
Interest: starts at 6.75%
Required Documents for House Construction in the Philippines
Just like other types of constructions, you need to complete the paperwork before you can start it. Make sure you have all these documents so you won’t run into any problems in the future.
Lot title or lot plan
This document proves that you are the legal owner of the lot. It is important for contractors because it will serve as their guide on how they will plan and design your dream house.
Affidavit of consent from the owner
If you do not own the lot, you need to get a lease contract or contract of sale from the owner so it can be transferred to your name.
This document will prove to the government that you are responsible for paying taxes for your real estate property. Aside from the tax declaration, you should also keep your latest tax receipts.
Community tax certificate
Cedula or Community Tax Certificate is given to people or businesses on payment of their community tax.
This is an essential document not only in constructing a house, but also to register a new company, and file income tax returns, among many others.
This is free because it’s the government’s duty to survey your land.
Special power of attorney
If the person building the house is an OFW who is not in the country, this document is needed.
Soil bore test
If you are planning on building a house that has three floors or more, this test needs to be done before construction commences.
You must obtain a barangay clearance before you construct your home. This is easy to get from the barangay office.
After you get your barangay clearance, head over to your city or municipality hall to secure this document.
You still can’t move to your house after it’s done. You need to get a building surveyor to signify that the building work is suitable for occupation.
Home Construction in the Philippines Step by Step Guide
Building a house is not as simple as going to the store and picking out paint colors. In this section, you will learn the necessary steps you need to undertake before you can make your dream home come to life.
Step 1: Determine the type of house you want
When you finally decide to construct your house, you need to think about what type of house you want to build.
Do you want a multi-story house? Do you prefer a bungalow? Do you just need one bedroom for yourself or multiple bedrooms for your children?
Make a list of your non-negotiables and use that as your guide especially when talking to contractors. When you know what type of house you want, you can get a more accurate quote. The planning process will also be faster.
Step 2: Meet professionals
Ask your friends and family for recommendations, and choose a reliable interior designer, engineer, and architect.
Then, discuss with them the size of the project, as well as your design requirements. These professionals know what building materials are needed, and what methods can be used to achieve what you want.
This professional will help you execute the plans for your dream home. The contractor will lead the team of electricians, construction workers, and skilled professionals needed to build your house.
Step 3: Site inspection
Before the details of the construction are made, the builders need to visit the location of your lot to check its dimensions, soil topography, and availability of water supply, electricity, and drainage system, among other utilities.
Visiting the location will also enable them to plan the logistics of the construction such as how to get the materials to your property.
This step will also enable them to determine the best orientation of your house.
Step 4: Approve the details
Before the construction begins, the architect and interior designer need to present the material specifications, swatch boards, and design plans.
Do not hesitate to ask them to alter anything if you don’t like it. This way, you can avoid costly mistakes and revisions in the future.
During this stage, you will also work with your contractor to get the estimated cost of your home. This includes the labor and cost of materials.
You can ask your contractors for an itemized breakdown of materials if needed. If you are working with a limited budget, be prepared to compromise.
Step 5: Contract signing
Once you have approved all the details about the project, you need to sign the construction contract and pay the down payment for the project.
Before signing the contract, make sure you understand its details, and you have realistic expectations of the project.
The contract will outline all the terms and conditions of the construction including the payment, target delivery date, warranties, and other schedules.
After the contract is signed, you or your contractor will take care of all the documents needed for the construction to commence.
Step 6: Construction Process
This stage starts with the building site preparation. After the site is leveled, the foundation is then finished. Next comes the framing.
When the house is in shape, it’s time to set up the electrical, and plumbing. Then comes the installation of interior and exterior finishes. Finally, it can be inspected.
All throughout the construction process, you need to have an open line of communication with your contractor, interior designer, and architect because they may need your approval on changes.
Home Building Tips for Future Filipino Home Owners
When it comes to building your home, preparation is key. This task is not only financially exhausting, but it can also drain you physically and emotionally.
To prevent stress, follow the tips below.
Prepare to go over budget
Anybody who has built a house before will tell you this tip is very important. No matter how much you plan, it’s impossible to stay within your budget.
Thankfully, if you plan your house right and you are clear about what you want from your contractor, architect, and interior designer, you won’t go over budget by a huge amount.
If you are working with a very tight budget, make sure to have a priority list. For example, you may be interested in fancy flooring instead of high-end appliances so you’re willing to compromise on the latter.
Hire the right people
Choosing the people to work with is one of the most vital decisions you will make so don’t rush it. If you do not have prior experience in building a property, do your homework by asking your trusted peers for suggestions.
Keep in mind that just because a professional looks great on paper does not mean they are the perfect fit for your project. Talk to them and examine their portfolio to determine whether or not they are the best fit for your home.
Visualize how you will live in your house
When building your house, make sure to visualize how you want to live there before approving any plans. For example, if you love to cook, a bigger kitchen with large countertops will be beneficial.
If you have a lot of younger children, you won’t like a home with sharp corners and glass everywhere.
Know that you will run into issues
There has never been a person who did not encounter issues while building their house. Major and minor issues are inevitable.
However, do not dwell on things you cannot control, and simply accept that not everything will go according to your plan. What may surprise you is your house may turn out better than you expected.
Visit the site
It would be a bad idea to only visit your house at the end of the construction stage since it may be too late to make adjustments.
If there’s a major installation for your house such as flooring or lights, be there because people may make decisions for you that you won’t like.
Position the bedroom well
This is one of the biggest mistakes people make. Your bedroom needs to be away from the noise so you can relax.
It should not be facing the street unless you like the view. Also avoid positioning the bedroom near your garage or the living area.
Home Building in the Philippines FAQs
Still got questions when it comes to home building? Here are some FAQs.
If you only want to factor in the initial cost, it’s cheaper to buy a house in the Philippines. Buying a house becomes more expensive when you consider renovation costs and repairs.
Yes. However, you need to plan your house well because even tiny houses can rack up more than a million in costs when you factor inexpensive designs and finishes.
If you have a very limited budget, you can still build a house. One of the most popular house styles is the Bahay Kubo. This is made using affordable materials such as coconut lumber, nipa, and bamboo.
The answer depends on what kind of house you want. For single-family homes, it could range from Php15,000 to Php20,000 per square meter. If you want a more luxurious home, be prepared to shell out up to Php63,150 per square meter1.
Excluding the lot, the most expensive part of your house is the framing. This includes the floor, roof, ceiling, and walls.
The bigger your house is, the more expensive the framing will be. The cost of framing can be broken down into labor, and materials used. Because this part is so important, it is important not to skimp on it. Otherwise, you may be stuck with a house that’s not structurally sound.