How Much Does It Cost to Build a House in the Philippines?

Building a house in the Philippines is a big dream for many Filipinos. Whether you're starting from scratch or planning to upgrade your current living situation, the journey to your dream home can be exciting—but also overwhelming. There are many things to consider, and it can be hard to know where to start.

One of the most important factors is cost. Building a house is a significant financial commitment, and without careful planning, the expenses can quickly spiral out of control. That's why it's crucial to have a detailed plan and budget in place. In this article, you'll be better equipped to take on your home-building journey with confidence.

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House Construction Project Types with Costs

The cost of building a residential home in the Philippines varies widely depending on the type of house project. Understanding these costs helps you plan and budget effectively.

According to Statista, from the first quarter of 2020 to the fourth quarter of 2023, the average residential construction cost was ₱11,310 per square meter.

Similarly, Lamudi Philippines reported in the first quarter of 2022 that building a house averaged ₱10,893.16 per square meter.

On the higher end, some construction companies and property platforms estimate costs ranging from ₱15,000 to ₱20,000 per square meter, depending on the project's complexity and materials used.

Knowing these ranges gives you a rough idea of the potential expenses for your project. Below, you’ll find cost estimations for specific house construction projects, making it easier to identify the best fit for your needs and budget.

Low-cost Housing Projects (₱10,000 to ₱25,000/sq. m.) 

These projects focus on affordability and functionality, perfect for first-time homeowners or those with smaller budgets.

Mid-range Residential Projects (₱30,000 to ₱35,000/sq. m.) 

Mid-range projects strike a balance between affordability and quality. Homes often include upgraded finishes and more amenities.

High-end Luxury Homes (₱35,000 to ₱50,000 and above/sq. m.)

• High-end luxury homes prioritize premium materials, advanced features, and custom designs.
• Home renovations and extensions (₱20,000 to ₱30,000/sq. m.). Home renovations and extensions update or expand existing structures, from minor fixes to major changes.

Custom-built homes

Custom-built homes are uniquely designed to match your specific preferences and needs that reflect your lifestyle. Below are common custom-built homes in the Philippines, and their cost highly varies depending on the type of finishes and materials you use.

You can choose whichever type of custom-built homes below and decide whether you’ll build with low-cost, mid-end, and high-end budget. 

Single-storey or Bungalow

A single-storey house, or bungalow, often features an open floor plan, combining living, dining, and kitchen areas for practicality and efficient use of space. These homes are ideal for small families or individuals seeking simplicity and accessibility. 

Two-storey

Two-storey homes provide separate spaces for living areas and bedrooms, offering more privacy and room for larger families. These homes maximize vertical space, making them ideal for smaller lots. 

Bamboo house

A bamboo house typically incorporates an open layout with lightweight bamboo walls and roofing. Known for their versatility and eco-friendliness, bamboo houses are sustainable and blend well with natural surroundings. 

• Tiny/Shipping container house

Tiny houses or container homes are compact, efficient, and constructed from durable materials like steel. They are popular for their cost-effectiveness and eco-friendly design. 

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Home renovations and extensions (₱20,000 to ₱30,000/sq. m.)

Home renovations and extensions update or expand existing structures, from minor fixes to major changes.

Key Factors Influencing Building Costs

Understanding the factors that affect construction costs is crucial for managing expectations and staying within your budget.  Knowing these details early on will help you plan better and avoid unexpected expenses, including:

Location and accessibility

The location and accessibility of your property play a big role in building costs. Land prices can vary widely across the Philippines. Urban areas like Metro Manila and Davao are more expensive, while rural provinces tend to have lower costs.

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Additionally, the proximity of suppliers and contractors impacts the overall cost. If your property is far from these resources, transportation fees and delivery times can increase your expenses. This is something to consider when budgeting for your project.

Size and design

The size and design of your house are major factors in building costs. The larger the house, the more materials and labor are needed, which directly impacts the price.

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For example, a bigger home will require more foundation work, walls, and roofing. Additionally, intricate designs with unconventional shapes or features can increase costs. These designs often need more specialized materials and skilled labor, leading to higher expenses.

Type of materials and finishes

The type of materials and finishes you choose greatly affects the overall building costs. Higher-quality materials typically come with a higher price tag. For example, luxury finishes like high-end appliances, custom cabinetry, imported tiles, hardwood flooring, and granite countertops can significantly increase costs

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Material prices also fluctuate based on market demand and availability. Eco-friendly materials, while often more expensive upfront, may help reduce long-term energy costs. Always consider your budget and priorities when choosing materials.

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Number of floors

Generally, the more floors your house has, the more expensive it will be. This is because adding extra floors increases the need for more materials, such as concrete, steel, and wood. Additionally, the foundation and structure must be strong enough to support the added weight, which can increase overall construction expenses.

Number of bathrooms

Bathrooms take up a significant portion of construction expenses as it involves plumbing work, fixtures, tiling, and ventilation systems.

Adding extra bathrooms means additional plumbing, fixtures, and labor, all of which contribute to the overall cost. More bathrooms also require extra time for installation, as well as higher material costs for tiles, faucets, and other bathroom fixtures. These costs can quickly add up, especially if you're aiming for higher-end finishes.

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What to Know Before You Build a Home

Before you start building your dream house, knowing what to expect and being prepared will make the journey smoother and less stressful. Let’s walk through the essential things you’ll need to consider before getting started.

Land Preparation and Acquisition Costs

The land where your home will sit needs to be properly prepared depending on location. These are the costs associated with preparing and acquiring land in the Philippines:

• Soil exploration or soil bore test. A soil bore test helps determine the soil’s stability and whether it can support the weight of your house. It’s an essential step to avoid foundation problems in the future.
• Lot survey care of the subdivision. A lot of surveys ensure that your property boundaries are properly marked. It’s important to avoid disputes over land ownership and construction setbacks.
• Handling fee and notarial fee. These fees cover the processing of documents related to your home loan. Handling fees range from ₱2,000 ($33.90) to ₱5,000 ($84.75), while notarial fees for each document range from ₱100 ($1.70) to ₱500 ($8.48).
• Notarial fee for Deed of Absolute Sale. This document proves the sale or transfer of property. The notarial fee typically ranges from 1% to 1.5% of the property’s selling price but should not be lower than ₱1,000 ($16.95).
• Mortgage registration fee. This fee is for registering your home loan with the government. The registration cost depends on the appraised value of your property. You can check the exact fee here.

Required Documents and Permits

Prior to construction, you need to secure several important documents and permits from your local government early on to avoid delays. You may work with a professional, like an architect or lawyer, to guide you through the paperwork.

• Building Permit
• Land of Ownership Documentssome text
  • Land titles
  • Deed of sale
  • Tax declaration
  • Latest tax receipts
  • Environmental clearance
  • Barangay Clearance
• Affidavit of consent from the owner or contract of sale (if you are not the owner of the land)
• Special Power of Attorney (if you do not currently live in the Philippines)

Insurance

While not always required, having insurance for your construction project can offer peace of mind. It helps protect your investment by covering potential risks like accidents, natural disasters, or damage to materials. Having the right insurance can ensure that you’re not financially burdened by unexpected setbacks during the building process.

Professional Fees

Building a house is a complex process that requires the expertise of professionals to bring your dream home to life. Hiring experts ensures the project is executed smoothly and meets your expectations.

• Architect Fee. Architects play a key role in designing your home and creating detailed plans and blueprints. Their fees usually range from 6% to 15% of the total construction cost, depending on the project's size and complexity. A contractor is also essential to oversee the construction process and ensure everything stays on track.
• Materials and Labor fee. The cost of materials depends on various components, like the foundation, walls, roofing, and finishes. Additionally, labor costs in the Philippines range from ₱500 to ₱800 per day, depending on the worker's skill level. Delays due to labor shortages could increase costs and extend timelines.

Post-Construction Taxes and Charges

After building your home, several taxes and fees must be settled to ensure the legal transition of ownership and compliance with local regulations. These charges help make your property legally habitable.

• Local transfer tax. This tax is mandatory for transferring ownership from the seller to the buyer. The rate varies depending on the local regulations of the city or municipality where the property is located.
• Documentary stamp tax. This fee is applied to legal documents, such as the deed of absolute sale, which confirms the sale or transfer of the property.
• Real property tax. An annual fee paid to the city or municipal treasury office, this tax applies to houses, lots, and condominiums to maintain property ownership compliance.

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How to stay within the Construction Budget

While building a house can be quite expensive, here are some practical ways to ensure you stay within your budget:

1. Plan your budget including contingency funds. Start by setting a realistic budget for your house project. Be sure to include contingency funds, ideally 10% of your budget, to help avoid financial strain and ensure you’re prepared for any surprises during construction.
2. Prioritize needs over wants. When planning your home, optimize your space wisely. Choose materials that offer long-term value and functionality. This ensures the design serves you well while keeping your budget in check.
3. Consult professional architects. Here in Pencil Design Studio, we can suggest cost-effective materials, efficient methods, and potential savings. If you're curious about a residential architect's role, read our article here. It’s also wise to get multiple quotes from contractors and subcontractors. Compare the quality of work and make the best decision for your budget.
4. Sourcing cost-effective and eco-friendly materials. Researching and comparing material costs can help you save money. Consider sourcing eco-friendly materials that are both cost-effective and sustainable such as energy-efficient appliances.
5. Manage expenses and timelines. Regularly check the progress of your project to ensure it stays on schedule. Identifying potential issues early can help avoid costly delays and keep your financial plans intact throughout the construction process.

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Key Takeaways

Building a house in the Philippines can be a complex and costly process, but it is also an exciting and rewarding experience. The key to managing the cost lies in careful planning, budgeting, and making informed decisions.

While it is important to understand the different factors that influence construction costs, it is best to seek professional help from architects, contractors, and other experts can guide you through the process smoothly.

If you're ready to turn your dream home into a reality, Pencil Design Studio is here to help. With our expertise and commitment to quality, we’ll guide you in every step of the way, ensuring that your home is built with care and within budget. Let's build your dream home today!

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