Property Market

Huge Demand for Affordable Housing

The Acute Housing Problems

Housing Problems around the Globe

The World Bank estimates that three billion people will live in substandard housing by 2030. In the Philippines alone, 70 million people live in substandard housing, and this is projected to grow to 113 million people by 2030. Housing indicators are sliding backwards; rapid urbanization is driving precarious construction in oftentimes precarious locations.

Housing Problems in the Philippines

Philippines has a huge housing need at the low end. Nationwide, the country has a housing shortage of about 4 million units, according to the Subdivision and Housing Developers Association (SHDA). But other estimates put the housing backlog at a huge 6.5 million units. Most of this would need to be socialized housing – units with a selling price of under PHP450,000 (US$8,132). In Metro Manila, as many as 300,000 households reside in informal and semi-uninhabitable housing units, composing 8.7% of Metro Manila’s total population. These people live in appalling conditions. Many others live in very poor conditions.

Reason for the housing shortage

Existing factors like the state of the country’s economy, interest rates, population growth, inflation, socio economic factors, high prices of existing real estate properties, as well as the shortage of inexpensive, conveniently situated properties inside urbanized areas are some of the factors.

Our Solutions

1. Affordable Housing

We focus on the preferred housing and needs of the millions of the lower- and middle-income groups. The current housing deficit and backlog in the whole country was estimated at between 4 to 6.5 million units.

2. House and Lots

We focus on house and lots which are the preferred real estate property of Filipinos. Buyers will own both the house and the land where it is built and provides more freedom and space to move around or make home improvements.

3. House and Lots in Growth Areas

We focus on house and lots outside the cities. In 2022, total cash remittances amounted to US$32.54 billion (which is about 8.1% of GDP), up by 3.6% from a year earlier, based on figures from the BSP.

The Market Size

Real Estate Markets

The real estate industry is a key driver of the Philippine economy, generating gross value added of about 536 billion Philippine pesos in 2022. Due to the growing middle-class population and the sustained remittances from overseas Filipino workers (OFWs), Filipinos’ purchasing and investing power in real estate properties had been gradually increasing in recent years. Published by Statista Research Department, Mar 10, 2023.

Real Estate Buyers

The Philippines is one of the world’s largest remittance recipients, with 10.2 million Philippine Overseas Foreign Workers (OFWs) living and working in 210 countries and territories worldwide. Among the permanent overseas Filipinos, 65.2% live in the US, followed by Canada (13.1%), Europe (7.1%), Australia (6.8%), and Japan (3.4%), according to the Commission on Filipinos Overseas (CFO).

Types of Preferred Housing

Majority of the occupied housing units were single houses

Of the total number of occupied housing units in the Philippines, 22,059,348 or 87.6 percent were single house. This was followed by occupied housing units in apartment/accessorial/row house with 1,628,258 (6.5%), in duplex with 746,765 (3.0%), in another multi-unit residential with 541,490 (2.1%), and in condominium/condotel with 169,327 (0.7%). Meanwhile, 46,346 (0.2%) were occupied housing units in commercial, industrial, agricultural buildings, institutional living quarters, and other types of building. (Figure 5).

For low-income groups, the researchers said ownership through mortgage finance is feasible but only for housing prices of P2 million and below. For middle-income groups, they are likely to have access to home ownership and to the formal housing market given their capacity to qualify for housing packages priced at P4 million to P8 million

The Opportunities

The World Bank estimates that three billion people will live in substandard housing by 2030. In the Philippines alone, 70 million people live in substandard housing, and this is projected to grow to 113 million people by 2030. Housing indicators are sliding backwards; rapid urbanization is driving precarious construction in oftentimes precarious locations.

2. The real estate industry is a key driver of the Philippine economy, generating gross value added of about 536 billion Philippine pesos in 2022. Due to the growing middle-class population and the sustained remittances from overseas Filipino workers (OFWs), Filipinos’ purchasing and investing power in real estate properties had been gradually increasing in recent years. Published by Statista Research Department, Mar 10, 2023.

3. The Philippines is one of the world’s largest remittance recipients, with 10.2 million Philippine Overseas Foreign Workers (OFWs) living and working in 210 countries and territories worldwide. Among the permanent overseas Filipinos, 65.2% live in the US, followed by Canada (13.1%), Europe (7.1%), Australia (6.8%), and Japan (3.4%), according to the Commission on Filipinos Overseas (CFO).

Section 2 of Batas Pambansa 220 (BP 220) provides that socialized and economic housing should be within low-income and average earners’ affordability level, which is at 30 percent of gross family income as determined by the National Economic and Development Authority (Neda). There are affordable housing packages available for the poor. These packages are 30 years to pay at 6 percent interest rate and 30 years to pay at 8 percent interest rate.

5. Increase in population will further increase the demand for houses. From 1960 to 2022, the population of the Philippines increased from 26.27 million to 115.56 million people. This is a growth of 339.9 percent in 62 years. (source World Data).