S&P: Home Prices in PH are Reasonable, But Market Seems ‘Frothy’
The Philippines’ residential property market appears to be “frothy” due to the uneven ratio of rentals to purchases, although prices remain at reasonable rates, according to an S&P analyst.
Ivan Tan, S&P director for financial institution ratings, said there the likelihood of a housing bubble remains slim, despite many Filipinos choosing to rent homes instead of buying them. High home prices could be a reason, as the most expensive cities in the country included Makati, Muntinlupa and Taguig.
Costing a Fortune
A Lamudi report showed that if you wanted to buy a house in Makati in 2016, you would have to pay an average of P209.6 million. This led the city to be the least affordable for home buyers, followed by Muntinlupa with an average home price of P59.5 million. Taguig ranked as the third most expensive city with an average price of P33 million.
Due to high home prices, it may not be surprising that there are more Filipinos who rent properties. However, Tan believes that rent-driven growth of real estate prices has certain complications. For now, a low jobless rate in the country and a stable economy will support a trend of renting homes.
While homes are expensive in some cities, buyers may find it encouraging to buy a house in Las Pinas or Marikina, where average prices amounted to P6.15 million and P6 million, respectively, according to Lamudi’s report.
Still, some buyers want to stretch their budget further, and this led them to find homes in provinces near Metro Manila, including Cavite. The province attracted interest due to many mixed-used developments with urban-style amenities such as community centers or restaurants. Lancaster New City, for instance, serves as an example.
Many Filipinos have their reasons for renting homes instead of buying them. However, owning a house gives you an unparalleled sense of security.