The Philippine Real Estate Market in 1Q 2024: Affordability Takes Center Stage in Online Home Search
Due to cost-of-living concerns, budget sensitivity is everywhere. Even homebuyers have been displaying price-consciousness, eyeing affordable properties listed on KB Reality Group. Across all property types, 41% of all inquiries on the platform were for the affordable price range (Php 6M and below), based on 1Q 2024 data.
The strong preference for affordable homes in the National Capital Region (NCR) indicates that seekers prefer housing with immediate access to better jobs, so much so that they are willing to trade off home sizes. In NCR, condos were the most in-demand affordable residential property type.
Proclamation of new ecozones outside NCR should open new opportunities for affordable home seekers. Developers and brokers are encouraged to promote housing in the Greater Manila Area and in highly urbanized cities of Visayas and Mindanao, where residents can afford homes near jobs.
Key Insights from KB Reality Group’s Real Estate Report for 1Q 2024
- The majority (44%) of inquiries for residential properties for sale on KB Reality Group were for units costing Php 6M and below.
- In 1Q 2024, NCR had the highest number of inquiries for affordable homes for sale. The region’s economic stability and wealth of employment opportunities make it attractive to homebuyers.
- Outside NCR, CALABARZON was the most preferred region for affordable housing. The region also had the second-highest supply of affordable housing on the KB Reality Group platform as of January 2024.
- Central Luzon was among the emerging locations for affordable homes due to its growing commercial activity.
- Millennials and Gen Z were the most active cohorts of property seekers on KB Reality Group in 1Q 2024, reflecting the increasing spending power of the young workforce in the Philippines.
Overseas Property Seekers Show Interest in Affordable Homes Outside NCR
As OFW remittances hit an all-time high in 2023, the property sector is expected to see sustained demand for housing in the Philippines. Based on KB Realty Group data for 4Q 2023, property seekers in top OFW destinations (Saudi Arabia and Dubai) expressed an equal interest in affordable homes within and outside NCR.
Cebu City, Davao, and Cagayan de Oro were among the VisMin cities that gained attention from property seekers in Saudi Arabia and Dubai. While many Filipinos still believe a better life awaits in Metro Manila, VisMin cities are now cropping up as alternative locations for upgraded lifestyles.
In our view, continuous development outside Metro Manila can expand home options for Filipinos and potentially lower the current costs of homeownership.
Based on the current average annual family income, a household would need at least 24% of their monthly earnings to afford a home worth Php 1.5M. In 4Q 2023, Luzon had the highest number of residential units costing Php 1.5M and below.
