Residential property values in the Philippines became more expensive between July and September 2017, according to a Bangko Sentral ng Pilipinas (BSP) study.
The study showed that prices rose 1.8% in the third quarter of 2017. This trend of higher residential real estate prices may continue if fewer homes will be built in the future.
Townhouse prices rose at the fastest rate at 7.3% in the covered period, followed by a 3.6% increase in condominium prices. Single-detached home values climbed 0.8%. This may be good news to investors, but the opposite deems true for property buyers.
Based on the BSP’s Residential Real Estate Price Index, the value of properties increased to a reading of 111.6 from 109.6 in the third quarter of 2016. The index uses data from banks’ home loans for different residential dwellings in the country.
New homebuyers accounted for almost 77% of these loans. While banks serve as a source of financing for housing transactions, the government should step up in providing funds for building affordable houses.
The Organization of Socialized Housing Developers of the Philippines expects a housing deficit of nearly 7.7 million homes by 2022. Population growth will be the main reason for a higher demand than supply. In the last five years, developers only built between 168,000 and 190,000 homes per year.
For now, it seems that aspiring homeowners will need to tolerate the current housing inventory. However, buyers now have different options in selecting homes, including website reviews for certain developments in provinces near Metro Manila such as Cavite.
A Lancaster review, for instance, will provide you with as much as information as possible before a visit.
The likelihood of higher residential property prices seems high, given the current supply and demand for homes. For this reason, the government should find ways to boost financing for low-cost properties, especially since banks and private-sector funding remains unlikely in the near future.