1.O BACKGROUND: What is a condominium? Most of us heard and even see what a condominium is. However, we still ask ourselves sometimes, why is it called a condominium? In a condominium (commonly called a condo), some parts of it, like our residence - are owned privately, while others - common areas - are owned collectively by all of the building's residents. A less technical way of describing a condo is an apartment that you own. In real-world terms, condos often take the form of an apartment or similar shared complex, but theoretically, a condo could physically look like anything.1 The difference between a condominium and an apartment is purely legal. What defines a condominium is the ownership. Technically, a condominium is a collection of individual home units along with the land upon the land which they sit.2 Condominium units are generally popular in areas with high property values, and vacation hotspots and urban settings are both locations where you can expect to find them on the market. This is mainly because buying a singlefamily home can be quite expensive in cities where additional building space may be scarce especially in Metro Manila. As such, condos can open home ownership to whole new groups of people. There are many good of reasons that a condo could be a better alternative to an apartment or single home, and money is surely one of them. According to The Real Estate Journal, the prices of condominiums tend to appreciate at a
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slower rate than single-family dwellings, making them a more cost-effective choice in markets where prices are on the rise. And, compared to renting an apartment, since you actually own your condo, you can take advantage of tax deductions, such as the interest on your mortgage. Real estate companies are now offering good deals, such as low interest rates, affordable payment schemes and easy payment options which are enticing for a borrower. For example, the Home Development Mutual Fund (HDMF) lowered their interest rates for housing loan packages for low and middle income families. Loan packages worth Php 300,000 will have a 6% interest rate while loans between Php 300,000 – Php 500,000 have a 7% interest rate. Loans over Php 500,000 to Php 1 million will have 10.5% interest, and loans over Php 1 million to Php 2 million have an 11.5% interest rate.3 Investing in a condo is a great way to increase net worth. Investing in a rental condo pays dividends in two ways. First, the monthly cash flow provides with an income. Ideally the rental charge will be more than the monthly expenses. The real payoff when investing in a condo is from the appreciation in the unit when you sell it. Typically, the longer you hold onto the condo, the greater your return on investment will be. View your investment in your condo as a long-term holding for maximum appreciation.4 2.0 STATEMENT OF THE PROBLEM

This study seeks to know the following:

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http://www.pagibigfund.gov.ph/News/January/jan2010b.htm http://www.essortment.com/home/buycondosreal_smvl.htm 1. What is the average monthly rental rate of studio type condominiums in Metro Manila (Makati and Non-Makati Area)? 2. Is there a significant difference between Makati and Non Makati rental rates? 3. Is there a significant difference between the rental rate of a fully-furnished and an unfurnished type condo? 4. Is there a significant relationship that exists between the size of condo and the monthly rental rate given a fully furnished or unfurnished type?

3.0 AIMS AND OBJECTIVES

This study is specifically designed to help the author in exploring investment options through renting condo units. The location is an important factor being considered. This paper will guide in making decision if it is advisable or feasible to buy a unit in Metro Manila whether in Makati City or outside Makati City. Another important aspect is the over-all condo package, whether it is fully-furnished or unfurnished. A fully furnished condo includes basic home appliances such as TV set, sofa, bed, aircon unit, etc. and at the same time, the interior is already finished and furnished with tiles, plasters, and other accessories. The results of this study will give the author and the readers as well, a more general view of the rate of renting a condominium in Metro Manila. The study consists of two parts. The first part focused on the rental rate of studio type condominium units, whether furnished or unfurnished, located in the Metro Manila area (Makati and Outside Makati). The second

part is an investigation whether there is a significant relationship that exists between the area of a condo unit and its rental rate, given a fully furnished and an unfurnished condo. In other words, is the rental rate significantly affected by its floor area? In the second part of study, the author considered only condominiums located outside Makati City area.

4.0 OVERVIEW OF METHODOLOGY/RESEARCH DESIGN The author employed quantitative type5 of research. The research utilized primary research methodology. Sample data were randomly selected from the internet sites and business section of magazines. After collecting the data,

applicable statistical tests and procedures were applied. The statistical tools and procedures employed were analysis of central tendency, hypothesis testing, analysis of difference in population means, analysis of the confidence interval, simple linear regression analysis and ANOVA.

5.0 ANALYSIS OF THE DATA

Part I- Condominiums in Metro Manila Table I shows forty random samples of condominium units located in Makati City and outside Makati City (Cities of Manila, Pasig, Las Pinas, Marikina, Quezon, Muntinlupa and Paranaque). The classification also includes whether the condominium unit is fully-furnished or unfurnished.

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Condo Unit Almanza Metropolis Amber Place Antel Platinum Tower Asia Tower- Paseo Asian Masion II Avida Tower Sucat Avida Towers New Manila BSA Tower Chateau Elysee Cityland 8 Cityland Makati Executive Tower Cityland Mega Plaza Cityland Pasong Tamo Cityland Pioneer Easton Place Eastwood Lafayette Fountain Breeze Garden Heights Condominium Gateway Garden Ridge Greenbelt Radissons LPL Tower Makati Executive Tower II Makati Prime Tower Manhattan Square Mezza Residences Monaco Garden Tower One Archer's Place One Gateway Place Oriental Gardens Makati Palm Tower Paseo Parkview Prince Plaza 2 Providence Towers

Location Outside Makati Outside Makati Makati Makati Makati Outside Makati Outside Makati Makati Outside Makati Makati Makati Outside Makati Makati Outside Makati Makati Outside Makati Outside Makati Outside Makati Outside Makati Makati Makati Makati Makati Makati Outside Makati Outside Makati Outside Makati Outside Makati Makati Makati Makati Makati Outside Makati

Unfurnished/ Fully Furnished Fully Furnished Unfurnished Unfurnished Fully Furnished Fully Furnished Fully Furnished Fully Furnished Unfurnished Unfurnished Fully Furnished Unfurnished Unfurnished Fully Furnished Unfurnished Fully Furnished Fully Furnished Fully Furnished Fully Furnished Unfurnished Unfurnished Unfurnished Fully Furnished Unfurnished Fully Furnished Unfurnished Unfurnished Unfurnished Unfurnished Fully Furnished Unfurnished Fully Furnished Fully Furnished Fully Furnished

Monthly Rental (in PhP) 15,000.00 16,500.00 16,500.00 28,000.00 27,000.00 15,000.00 13,000.00 17,000.00 15,000.00 12,000.00 15,000.00 14,000.00 14,000.00 15,000.00 18,000.00 18,000.00 15,000.00 14,000.00 15,000.00 23,000.00 19,000.00 16,500.00 19,000.00 33,000.00 15,000.00 21,500.00 15,000.00 17,000.00 30,000.00 15,000.00 30,000.00 20,000.00 16,000.00

Raya Garden Sison Mansion Skyway Twin Tower Somerset Olympia Swire Elan Suites The Columns Ayala West Parc Muntinlupa a) Summary Statistics:

Outside Makati Makati Outside Makati Makati Outside Makati Makati Outside Makati

Unfurnished Unfurnished Fully Furnished Unfurnished Fully Furnished Unfurnished Fully Furnished

22,000.00 17,000.00 15,000.00 17,000.00 18,000.00 17,000.00 30,000.00

Monthly Rental (in Monthly PhP) Rental (in (Outside PhP) (Makati) Makati) One Variable Summary Mean Variance Std. Dev. Skewness Kurtosis Median Mode Minimum Maximum Range 1st Quartile 3rd Quartile i. ii. iii.

Monthly Rental (in PhP) (Fully Furnished)

Monthly Rental (in PhP) (Unfurnished)

Data Set #1 Data Set #1 Data Set #1 Data Set #1 20,200.00 16,750.00 19,875.00 17,075.00 37194736.84 15065789.47 47733552.63 6665131.58 6098.75 3881.47 6908.95 2581.69 0.8954 2.4391 0.7934 1.1432 2.5664 9.8021 1.9735 3.4464 17,000.00 15,000.00 16,500.00 16,500.00 17,000.00 15,000.00 15,000.00 15,000.00 12,000.00 13,000.00 12,000.00 14,000.00 33,000.00 30,000.00 33,000.00 23,000.00 21,000.00 17,000.00 21,000.00 9,000.00 16,500.00 15,000.00 15,000.00 15,000.00 23,000.00 17,000.00 27,000.00 17,000.00

On the average, the rental rate for a Makati condo is more expensive than Outside Makati condo by 20%. You expect that the rental rate for fully-furnished condo is more expensive than an unfurnished condo by 16%. 60% of condo units located Outside Makati City has a rental rate PhP 15,000.00 and below. While 65% of Makati condos are in the range of Php 19,000.00 and below.

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Majority (75%) of unfurnished condo units have rental rate below PhP 17,000.00. While fully furnished condo are generally in the range of Php 19,000.00 and below (65% of the samples considered).

b) Confidence Intervals: i. In terms of location: Confidence Interval Estimate for the Mean Makati Outside City Area Makati Data Sample Standard Deviation 6098.75 3881.47 Sample Mean 20200 16750 Sample Size 20 20 Confidence Level 95% 95% Intermediate Calculations Standard Error of the Mean 1363.722 867.9230773 Degrees of Freedom 19 19 t Value 2.093024 2.09302405 Interval Half Width 2854.3029 1816.583874 Confidence Interval Interval Lower Limit 17345.70 Interval Upper Limit 23054.30

14933.42 18566.58

ii. In terms of packaging (fully-furnished and unfurnished) Confidence Interval Estimate for the Mean Unfurnished Furnished Data Sample Standard Deviation Sample Mean Sample Size Confidence Level 2581.69 17075 20 95% 6908.95 19875 20 95%

Intermediate Calculations Standard Error of the Mean 577.2834337 1544.888185 Degrees of Freedom 19 19 t Value 2.09302405 2.09302405 Interval Half Width 1208.26811 3233.488126 Confidence Interval Interval Lower Limit Interval Upper Limit

15866.73 18283.27

16641.51 23108.49

At 95% confidence level, the mean rental rate of condominiums located in Makati City is estimated to be between Php 17,345.70 and PhP 23,054.30 while for Outside Makati City Area, it is between PhP 14,933.42 and PhP 18,566.58. In terms of packaging, at 95% confidence interval, the mean rental rate of Unfurnished condo is between PhP 15,866.73 and Php 18,283.27 while for Fullyfurnished, it is estimated between PhP 16,641.51 and Php 23,108.49. It can be noted that in both cases, the intervals overlap. One would conclude that there is no significant difference in the rental rates between Makati and NonMakati condo likewise, same through with Unfurnished and Fully-furnished condos. Further analysis will be made in the subsequent statistical analysis. c) Is the rental rate in Makati City significantly different from Outside Makati City area?
Makati 16,500.00 28,000.00 27,000.00 17,000.00 12,000.00 15,000.00 14,000.00 18,000.00 23,000.00 19,000.00 16,500.00 Outside Makati 15,000.00 16,500.00 15,000.00 13,000.00 15,000.00 14,000.00 15,000.00 18,000.00 15,000.00 14,000.00 15,000.00

19,000.00 33,000.00 30,000.00 15,000.00 30,000.00 20,000.00 17,000.00 17,000.00 17,000.00

15,000.00 21,500.00 15,000.00 17,000.00 16,000.00 22,000.00 15,000.00 18,000.00 30,000.00

Using Hypothesis Test for Differences in Two Means: 1. Ho: µ1-µ2= 0 Ha: µ1-µ2≠ 0 2. Assume α= 0.50 3. Reject Ho and accept the alternative if p