YOUR PROPERTY DOUBLED IN VALUE. BUT WAS IT ACTUALLY A GOOD INVESTMENT?

Buyer 1 bought a condo in 2020 for P10 Mn and sold it in 2025 for P20 Mn. He doubled his money in 5 years.

Buyer 2 bought a condo in 2015 for P10 Mn and also sold it in 2025 for P20 Mn. Doubled his money too.

Both are big wins. But was one better? And how do we measure it?

This is where the Compounded Annual Growth Rate (CAGR) comes in. It coughs up one annual percentage you can use to compare any investment: condos, lots, stocks, bonds.

First, a common mistake. You can't just divide the gain by the number of years. Saying Buyer 1 earned 20% a year (100% / 5 years) ignores compounding, so it overstates the return.

The formula:

= (new price / old price) ^ (1 / n) - 1

where n = number of years. The ^ is called a "caret" and it means "raised to the power of."

Let's plug in Buyer 1:

= (20,000,000 / 10,000,000) ^ (1/5) - 1

Type that into Excel, or into Spotlight on a Mac (without the equals sign). You should get 0.1487, or 14.87% a year.

Want to check it? Grow P10 Mn by 14.87% five times:

P10 Mn x (1+.1487) x (1+.1487) x (1+.1487) x (1+.1487) x (1+.1487) = P20 Mn

Now do Buyer 2. Same numbers, but n = 10. You'll get 7.18% a year.

Same profit. But Buyer 1 grew his money twice as fast.

Here's a real one. Based on JPRE Research closed sales, One Rockwell's median resale price went from about P194,000/sqm in 2021 to P265,000/sqm in 2025. That's 8.2% a year. Loyola Grand Villas lots went from about P105,000/sqm to P144,000/sqm over the same years. Also 8.2%.

Same CAGR. Equally good deals? Not quite. CAGR doesn't tell you about:

1. Income. The condo could have been rented out the whole time. The lot just sat there.

2. Headache. A lot mostly just sits there. A rented condo means tenants, repairs, vacancies and late payments.

3. Liquidity. A condo has a far bigger pool of buyers than a P70 Mn lot.

Why does this matter? CAGR lets you put your condo side by side with time deposit, stocks, bonds or another property and see which one actually worked harder.

Try the three exercises in the photos. Answers in the comments.

Exercise 1: the Abrio lot wins

.

Abrio (Nuvali) lot: (28,000 / 20,000) ^ (1/4) - 1 = 8.78%

PSEi: (7,815.26 / 7,230.57) ^ (1/5) - 1 = 1.57%

Aboitiz Power bond: 6.10%

.

.

Exercise 2: One Rockwell wins

.

One Rockwell studio: (6,900,000 / 5,140,000) ^ (1/4) - 1 = 7.64%

ALI stock: (45.50 / 33.70) ^ (1/5) - 1 = 6.19%

Aboitiz Power bond: 6.10%

.

.

Exercise 3: the West Triangle lot wins

.

West Triangle lot: (70,000 / 2,500) ^ (1/29) - 1 = 12.18%

Ayala Heights lot: (110,000 / 4,500) ^ (1/29) - 1 = 11.65%

Buffett-style index portfolio: 10.01%