Philippine House Prices continued their relentless climb in the 4th quarter of 2014, climbing 1.03% over the third quarter. To date, prices have risen over 110.23% since the fourth quarter of 2004, outpacing inflation which has caused prices to climb by a corresponding 58.21% for the same period.
Given this substantial increase, do Philippine House Prices still have more room to run?
On the face of it, the answer is yes. Why? Because House Price Cost per Sq. M. amounts to just US$ 3,084, well below the Asian average of US$ 8,257. Out of 10 countries listed in the Global Property Guide, Philippine House Prices rank the third lowest in the region, just ahead of Cambodia (US$ 2,913) and just behind Thailand (US$ 3,952).
According to Global Property Guide, these prices are for residential properties in the center of the most important city of each country - either the administrative or financial capital of each country.
Source: Global Property Guide
But these prices ignore affordability. Different countries have different income levels. Therefore, countries that have a higher income on a per capita basis can afford pricier properties.
Unfortunately, there is a dearth of data when it comes to a city by city income statistics. The closest and most widely available data is GDP per capita, the latest of which is for the year 2013.
Source: www.worldbank.org
Based on this data, the Philippines has the third lowest GDP per capita for 2013: US$ 2,765, ahead of India (US$ 1,499) but below Indonesia (US$ 3,475). Naturally, both Singapore and Hong Kong boast of the highest incomes and therefore have the highest property prices.
Using GDP per capita as a proxy for income, on a house price to income ratio, the Philippines does not look so reasonably priced. After India (764 times income) and Cambodia (289 times income), the Philippines house price to income ratio comes in at 112 times income. This is higher even that bubblelicious China, which comes in at 102 times income. The Philippine House Price to Income Ratio is double the regional average of 50 times income.
| Country | Housing Cost Per Sq. M. in Prime CBD (in USD $) | Cost of 100 Sq. M. Residential Condo in CBD (in USD $) | 2013 GDP Per Capita (Current USD $) | Residential Price/GDP Per Capita (in USD $) |
| Cambodia | 2,913 | 291,300 | 1,007 | 289 |
| China | 6,932 | 693,200 | 6,807 | 102 |
| Hong Kong | 22,814 | 2,281,400 | 38,124 | 60 |
| India | 11,455 | 1,145,500 | 1,499 | 764 |
| Indonesia | 2,766 | 276,600 | 3,475 | 80 |
| Japan | 10,784 | 1,078,400 | 38,634 | 28 |
| Malaysia | 2,616 | 261,600 | 10,538 | 25 |
| Philippines | 3,084 | 308,400 | 2,765 | 112 |
| Singapore | 15,251 | 1,525,100 | 55,183 | 28 |
| Thailand | 3,952 | 395,200 | 5,779 | 68 |
| Average | 8,257 | 825,670 | 16,381 | 50 |
| Source: | Global Property Guide |
According to the Global Property Guide, Low Middle Income and Low Income countries like India and Cambodia generally have higher price to income ratios.
On a global basis, the Philippines has the third highest House Price to Income Ratio, behind India (764 times income), Cambodia (289 times income), Gambia (137 times income). It is tied with Madagascar (112 times income) and just ahead of Russia (108 times income). Among the Lower Middle Income countries, the Philippines ranks second behind India and just ahead of Indonesia (80 times income).
| Country | Housing Cost Per Sq. M. in Prime CBD (in USD $) | Cost of 100 Sq. M. Residential Condo in CBD (in USD $) | 2013 GDP Per Capita (Current USD $) | Residential Price/GDP Per Capita (in USD $) | Income Class |
| Russia | 15,772 | 1,577,187 | 14,612 | 108 | High Income |
| United Kingdom | 33,993 | 3,399,339 | 41,788 | 81 | High Income |
| Hong Kong | 22,814 | 2,281,400 | 38,124 | 60 | High Income |
| France | 18,128 | 1,812,848 | 42,503 | 43 | High Income |
| USA | 18,499 | 1,849,900 | 53,042 | 35 | High Income |
| Japan | 10,784 | 1,078,400 | 38,634 | 28 | High Income |
| Singapore | 15,251 | 1,525,100 | 55,183 | 28 | High Income |
| Israel | 9,511 | 951,100 | 36,051 | 26 | High Income |
| Antigua | 3,501 | 350,100 | 13,342 | 26 | High Income |
| St. Kitts and Nevis | 3,496 | 349,600 | 14,133 | 25 | High Income |
| Italy | 7,882 | 788,195 | 35,926 | 22 | High Income |
| Switzerland | 15,028 | 1,502,754 | 84,815 | 18 | High Income |
| Chile | 2,749 | 274,900 | 15,732 | 17 | High Income |
| Finland | 8,259 | 825,943 | 49,147 | 17 | High Income |
| Bahamas | 3,632 | 363,200 | 22,312 | 16 | High Income |
| Canada | 8,288 | 828,800 | 51,958 | 16 | High Income |
| Uruguay | 2,562 | 256,200 | 16,351 | 16 | High Income |
| Sweden | 9,292 | 929,219 | 60,430 | 15 | High Income |
| Spain | 4,575 | 457,499 | 29,863 | 15 | High Income |
| New Zealand | 5,611 | 561,100 | 41,556 | 14 | High Income |
| Netherlands | 6,522 | 652,221 | 50,793 | 13 | High Income |
| Trinidad & Tobago | 2,334 | 233,400 | 18,373 | 13 | High Income |
| Germany | 5,420 | 542,033 | 46,269 | 12 | High Income |
| United Arab Emirates | 5,037 | 503,700 | 43,049 | 12 | High Income |
| Australia | 7,626 | 762,600 | 67,458 | 11 | High Income |
| Ireland | 5,524 | 552,401 | 50,503 | 11 | High Income |
| Denmark | 5,711 | 571,142 | 59,832 | 10 | High Income |
| Puerto Rico | 1,365 | 136,500 | 28,529 | 5 | High Income |
| China | 6,932 | 693,200 | 6,807 | 102 | Upper Middle Income |
| Thailand | 3,952 | 395,200 | 5,779 | 68 | Upper Middle Income |
| South Africa | 4,101 | 410,100 | 6,618 | 62 | Upper Middle Income |
| Belize | 2,322 | 232,200 | 4,894 | 47 | Upper Middle Income |
| Lebanon | 3,693 | 369,300 | 9,928 | 37 | Upper Middle Income |
| Dominican Republic | 2,078 | 207,800 | 5,879 | 35 | Upper Middle Income |
| Brazil | 3,751 | 375,100 | 11,208 | 33 | Upper Middle Income |
| Colombia | 2,379 | 237,900 | 7,831 | 30 | Upper Middle Income |
| Peru | 1,810 | 181,000 | 6,662 | 27 | Upper Middle Income |
| Jamaica | 1,404 | 140,400 | 5,290 | 27 | Upper Middle Income |
| Mexico | 2,635 | 263,500 | 10,307 | 26 | Upper Middle Income |
| St. Lucia | 1,860 | 186,000 | 7,328 | 25 | Upper Middle Income |
| Malaysia | 2,616 | 261,600 | 10,538 | 25 | Upper Middle Income |
| Jordan | 1,282 | 128,200 | 5,214 | 25 | Upper Middle Income |
| Ecuador | 1,278 | 127,800 | 6,003 | 21 | Upper Middle Income |
| Argentina | 2,813 | 281,300 | 14,715 | 19 | Upper Middle Income |
| Panama | 2,001 | 200,100 | 11,037 | 18 | Upper Middle Income |
| Costa Rica | 1,642 | 164,200 | 10,185 | 16 | Upper Middle Income |
| India | 11,455 | 1,145,500 | 1,499 | 764 | Lower Middle Income |
| Philippines | 3,084 | 308,400 | 2,765 | 112 | Lower Middle Income |
| Indonesia | 2,766 | 276,600 | 3,475 | 80 | Lower Middle Income |
| Nicaragua | 1,342 | 134,200 | 1,851 | 72 | Lower Middle Income |
| Morocco | 2,015 | 201,500 | 3,093 | 65 | Lower Middle Income |
| Cape Verde | 1,300 | 130,000 | 3,767 | 35 | Lower Middle Income |
| El Salvador | 1,193 | 119,300 | 3,826 | 31 | Lower Middle Income |
| Egypt | 831 | 83,100 | 3,315 | 25 | Lower Middle Income |
| Cambodia | 2,913 | 291,300 | 1,007 | 289 | Low Income |
| Gambia | 667 | 66,700 | 489 | 137 | Low Income |
| Madagascar | 520 | 52,000 | 463 | 112 | Low Income |
| Tanzania | 700 | 70,000 | 695 | 101 | Low Income |
| Kenya | 900 | 90,000 | 1,246 | 72 | Low Income |
Source: www.worldbank.org
So do Philippine Housing Prices still have more room to run? Maybe so. But the odds looked stacked against it.
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