Major Reason: High Real Estate Costs Prevent Filipinos from Buying a House and Lot

1. Rising Land Prices

• What It Means: The cost of land in the Philippines, particularly in cities and developing areas, has surged due to urbanization, population growth, and speculative investments. Even rural areas are seeing increases as infrastructure improves and land becomes a commodity for investors.
• Why It Matters: Rising land prices make it challenging for developers to offer affordable housing, passing costs onto buyers. Families on lower incomes are particularly affected as they cannot keep up with these price increases.
• Results: Many individuals must either compromise on location, opting for distant provinces, or continue renting, delaying homeownership indefinitely.
• Example: A lot in Cavite that cost PHP 2,000 per square meter a decade ago now costs PHP 20,000 per square meter, making it unaffordable for average wage earners​HQ Manila​Philstar.

2. Construction Costs

• What It Means: Prices for materials like cement, steel, and labor have risen significantly, driven by global supply chain disruptions and local inefficiencies. Developers struggle to control construction costs, which leads to more expensive housing.
• Why It Matters: Even if land prices are affordable, the high cost of building a home adds to the total expense, further pricing out low-income buyers.
• Results: Developers focus on mid-range and high-end housing projects that yield better profit margins, neglecting the demand for affordable homes.
• Example: A basic house that cost PHP 1 million to construct five years ago now requires an additional 20–30% in costs, pushing the price out of reach for many buyers​Moneymax​Philstar.

3. Regulatory Hurdles for Developers

• What It Means: Stringent government regulations, lengthy permit processes, and inconsistent policies increase the time and cost of developing housing projects. Developers pass these expenses onto buyers.
• Why It Matters: Developers are discouraged from creating affordable housing due to slim profit margins, exacerbating the housing backlog. Streamlining regulations could improve affordability and supply.
• Results: High transaction and compliance costs make housing unaffordable for middle- and lower-income groups.
• Example: Delays in obtaining land conversion permits often mean higher costs for developers, which translate to higher property prices​Philstar.

4. Limited Socialized Housing Options

• What It Means: Socialized housing programs, which aim to provide affordable housing for low-income families, are underfunded and poorly implemented. Price ceilings on such projects sometimes discourage developers from participating.
• Why It Matters: Without accessible socialized housing, many Filipinos remain reliant on rental properties or informal housing.
• Results: Substantial housing backlogs persist, with limited affordable options pushing low-income families into unsafe living conditions.
• Example: In 2018, socialized housing accounted for the largest decline in “licenses to sell” issued, as developers found government-imposed price ceilings financially unviable​Philstar.

5. Speculative Buying and Investments

• What It Means: Wealthier investors often buy multiple properties as speculative investments, contributing to artificial price inflation. This makes it even harder for regular buyers to afford homes.
• Why It Matters: Speculative demand drives prices far beyond the financial capacity of most Filipinos, leaving properties vacant while real housing needs go unmet.
• Results: The housing market becomes inaccessible to the working class, and wealth inequality widens.
• Example: High-rise condominium units in Metro Manila are increasingly purchased by investors, with some remaining unoccupied, while working-class families are priced out​HQ Manila.

Addressing the Problem

High real estate costs can be mitigated through government intervention, such as incentivizing affordable housing development, capping speculative investments, and improving urban planning to make lower-cost areas accessible. Additionally, policies to support low-income buyers, like subsidized loans, can empower more Filipinos to afford homes.