James Thornton
Asia Pacific Real Estate Investment Analyst
Pre-selling condominium investment in Boracay offers one of the most attractive risk-reward propositions in Philippine real estate — but only for investors who understand the risks and have the patience to see it through.
Why Pre-Selling Is Attractive
Pre-selling prices in Boracay developments are typically 25–40% below the projected selling price at completion. This discount compensates the buyer for taking on development risk and for the opportunity cost of having their capital committed during the construction period (typically 2–4 years). Payment terms at pre-selling are also the most flexible of any purchase stage. Developers typically require 10–20% downpayment with the balance spread over the construction period in monthly or quarterly installments.
The Risks That Must Be Accepted
Development risk is real in Philippine pre-selling real estate. Key risks include: project delays (extremely common — add 12–24 months to any developer-stated completion date as a planning buffer), modifications to project specifications during construction, financial difficulties of the developer leading to construction stoppages, and changes in the regulatory environment. The best risk mitigation is developer selection. Investing with established, well-capitalized developers with strong completion track records — Megaworld, Ayala Land, SM Prime — dramatically reduces development risk.
The Assignment Market: Exit Before Completion
One aspect of pre-selling investment often overlooked by first-time investors is the assignment market. Pre-selling buyers have the right (subject to developer consent and assignment fee) to sell their position in the contract to another buyer before the project is complete. This creates an intermediate exit strategy for investors who need liquidity before turnover. In a rising market, pre-selling units in Boracay have historically been assignable at prices above the original purchase price during the construction period.
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