The housing backlog in the Philippines continues to grow with no determinable end in sight. Property developers are finding ways to meet this ever-increasing demand through affordable housing. They would need to tailor their efforts to the prospective buyers that search for it online. This could result in more focus in the surrounding metropolitan locations.
Who are the Home Seekers Buying Affordable Housing?
- Almost twice the number of women are looking into affordable housing than men
- Online inquiries are dominated by the 25 to 34-year-old age group
- 50% of prospective buyers are most interested in the Php 1.7 to 3 million price range
- Over 40% of home seekers come from Quezon City, followed by Makati City at around 20%
- Tuesdays were the top day and 9:00 PM to 11:00 PM were the peak times for these online searches
- The provinces of Cavite, Rizal and Bulacan are the most searched areas for affordable housing
The exclusive search data of Lamudi was able to yield impressive results into the affordable housing market. It was not only able to identify which demographic inquired about it the most but also popular price brackets. This was further supported by information on the areas where these properties are being searched for. The data also included the top locations prospective buyers came from and times the inquiries were made. This information could be used by the real estate industry to refocus their efforts to directly cater to this demand.
The developing situation
Finding a moderately priced home is indeed an attractive prospect for any home buyer. The question is if there is enough property to satisfy the demands of the affordable housing market? Currently, the answer is no.
This was made clear at The Outlook 2017 by Lamudi Philippines. In attendance were some of the leading players in the local real estate industry. Among them was Atty. Christopher Ryan Tan, a former president of the Organization of Socialized Housing Developers of the Philippines. He is presently the CEO of Hausland Development Corporation and made an observation on the country’s housing predicament. Tan estimates that “It’s somewhere between 168,000 and 190,000 housing backlog a year.”
This number, however, continues to increase annually, along with the entrance of new prospective buyers. He further states, “So when you do the math, considering that population grows, it seems that you would not be able to catch up. So that’s really a huge problem.”
It is a challenge that the Philippine government is taking on along with private developers and a concern many academic institutions is looking into. The Center for Research and Communication of the University of Asia and the Pacific (CRC-UAP) previously compiled an industry report, in participation with the Subdivision and Housing Developers Association (SHDA). Their study entitled, “Impact of Housing Activities on the Philippine Economy” was the result of their combined efforts. It produced information that put the housing backlog in 2015 at 6.7 million. This further yielded housing requirements of 5.6 million between 2016 to 2030. The housing backlog could potentially total to 12.3 million by 2030.
Popular price point
The Housing and Urban Development Coordinating Council (HUDCC) identified three segments in the affordable housing sector. These were homes categorized into the following price brackets:
- Socialized housing: Php 450,000 or less
- Economic housing: Php 450,000 to 1.7 million
- Low-cost housing: Php 1.7 million to 3 million
Lamudi’s exclusive search data from the first quarter of 2018 revealed which garnered the highest percentage of online inquiries. It was the low-cost housing price bracket at 50%. This was closely followed by the economic housing bracket at 44%. Socialized housing rounded the affordable housing sector inquiries out at 6%. This information, however, must take into consideration other factors.
One of them is the concept of availability. The searches ran parallel to the higher number of units available. These were in the Php 1.7 to 3 million as well as Php 3 to 4 million price ranges. The latter is identified as the medium-cost market having an oversupply of about half a million units in 2015. This was supported by the report provided by the CRC-UAP and SHDA.
Interest by demographic
Men had significantly less interest than women when it came to seeking for affordable properties. The number was almost half compared to their female counterparts. Lamudi’s exclusive search data revealed that 36 percent of searches were made by men in the first quarter of 2018. On the opposite end was 64 percent coming from the female population. These were property seekers looking for homes below the Php 3 million price range.
The data were complemented by different age groups. There were six namely:
- 18 to 24 years old
- 25 to 34 years old
- 35 to 44 years old
- 45 to 54 years old
- 55 to 64 years old
- 65 years old and above
It was the 25 to 34 years old age segment that garnered the highest number of search results for affordable housing. This comprised 40 percent of the total. Females represented the bulk of this number at 27 percent. It was completed with 13 percent of prospective male homebuyers.
Cities and municipalities targeted
There were varying areas coming out on top of the three affordable housing price brackets. Quezon City (23.39%) was the first choice for the low-cost housing (Php 1.7 to 3 million) group. Economic housing (Php 450,000 to 1.7 million) had the most interest in Davao City (20.92%). While the socialized housing (Php 450,000 or less) group held Rodriguez (23.78%) in Rizal province as their top choice.
Quezon City and Caloocan were the only Metro Manila locations that made it to the top five of any category. Cavite, however, was well-represented with four areas searched. This was followed by Rizal province with three and Bulacan with two. All of these are situated either in the outer portions or within the immediate vicinity of Metro Manila. This is with the exception of Davao City and Cagayan de Oro.
Potential clients and peak times
Quezon City-based house seekers topped online searches for affordable housing across the three price brackets. It followed a similar trend of 42.98% for socialized housing, 38.57% for economic housing and 40.03% for low-cost housing. Makati City likewise appeared on the same spot in three categories at second place. The figures were 17.70% for socialized housing, 20.58% for economic housing and 21.25% for low-cost housing. Combined, these two cities already represent the majority of online searches for affordable housing in the Philippines.
Most of the affordable seekers came from densely populated metropolitan areas around the Philippines. Bacoor is the only exception however it is considered as a gateway to Metro Manila and located at its immediate southern portion.
There were three days out of the week which produced significant numbers by online affordable home seekers. These were Tuesday (15.07%), Thursday (14.94%) and Friday (14.40%). The peak times when these were being conducted were 9:00 PM to 11:00 PM (12%) and 1:00 PM to 3:00 PM (11.5%).
Higher demand for lower-priced homes
Price is the prime consideration for Filipino home buyers. It takes precedence over a favorable location and even living space. The availability of affordable housing, however, is constantly low in supply. This segment comprises part of the nationwide housing backlog that grows on a yearly basis. Both the public and private sectors recognize this dilemma and have been hard at work to address the situation.
Recognized luxury developers are joining into the fray. Companies such as Century Properties in partnership with Mitsubishi Corporation as well as Rockwell Land have made public their plans to enter the affordable housing market. Primary Homes while not a luxury developer has found success in this segment. Its Brentwood low to medium-cost housing concept is an award-winning project cited in 2017 as the best condominium development in Cebu. The company is proof that there is a healthy demand for these types of housing.
Leads generated per price bracket
Properties within the Php1.7 million to Php3 million price range fell under the affordable housing market. Unsurprisingly, data showed that the interest for properties under Php3 million were some of the highest among property seekers. However, affordable property seekers also took great interest in properties within the Php3 million to Php4.5 million, showing that they can adjust their budget should there be a need for it.
Lamudi is the Philippines’ number one real estate partner. It started operations in the country in 2014. Our online platform attracts 1,500,000 visitors which generates 100,000 monthly leads for our subscribers. We are a unit of the Rocket Internet group, an international leader in online businesses. Visit our website at https://www.lamudi.com.ph/contact/. Our numbers are Globe: 0977 174 4019, Smart: 0929 560 5386, Landline: 02 218 4693. You can also email us thru email@example.com.