QUICK AND DIRTY PRICE/SQM

Ever find a condo online that looks like a great deal? Before you get too excited, it’s crucial to calculate the price per square meter (PPSM) to see if it really is a good buy.

Steps to Calculate PPSM:

Note the Selling Price and Floor Area: Start with the posted selling price and the condo's floor area.

Adjust for Parking Slot: If the condo includes a parking slot, adjust the price accordingly.

Typically, you would:

Subtract the value of the parking slot from the selling price.

To find the parking slot value, you would check its zonal value and multiply it by 12.5 sqm (the standard size of a parking slot).

However, finding the zonal value for each parking slot can be tedious. Instead, you can use this simplified formula:

= SELLING PRICE / [ FLOOR AREA + ( AREA OF PSLOT * 0.7 ) ]

Since we know that a standard size of parking slot is 12.5 sqm, the equation then becomes:​

= SELLING PRICE / [ FLOOR AREA + ( 12.5 * 0.7 ) ]

= SELLING PRICE / ( FLOOR AREA + 8.75 )

Simply put: Divide the selling price by the sum of the floor area and 70% of the parking slot area.

Why Use 0.7?

The value 0.7 (or 70%) is based on the Bureau of Internal Revenue's (BIR) assigned value for parking slots, which is 70% of the unit's value. This factor approximates the parking slot's value.

Example Calculation:

Selling Price: ₱43,500,000

Floor Area: 150 sqm

Number of Parking Slots: 1

Zonal Value of Parking per sqm: ₱192,500

Using the traditional method to compute would result to P273,958.33.

Using the Simplified Formula: we will get P274,015.75, which is not very far from the answer above.

Multiple Parking Slots:

If there are multiple parking slots, adjust the formula accordingly:

= SELLING PRICE / [ FLOOR AREA + ( # OF PARKING * 12.5 * 0.7 ) ]

Try this method for a quick approximation of the PPSM. This formula comes in especially useful when you have to compute the PPSM for hundreds of listings.

Enjoy! 🤓