The challenges facing the real estate market in the Philippines

By:Arrah Manticajon|June 17, 2019

There is a housing backlog of 6.7 million homes as of 2015, based on a report from the Philippine Star. Citing a study from the Asian Development Bank, 12.3 million houses should be built by 2030 to keep up with demand.

There are a number of reasons which have contributed to the shortage of houses. One of these is the price of houses in relation to the monthly amortization that homeowners can afford to pay. Secondly, landowners would have to wait for two to three years to convert raw land into useful land.

However, recent changes in the law seek to eliminate these hurdles in an attempt to address the housing shortage. For one, the Department of Agriculture has come up with DAR Administrative Order No. 1 to streamline the process of converting land. The said order shortens the land conversion process from two years to 30 days. With regard to the issue of affordable housing, housing advocacy group Subdivision and Housing Developers Association, Inc. (SHDA) is lobbying for keeping in place the income tax holiday when the second package of the TRAIN Law is implemented, as well as cutting down the corporate income tax from 30 to 25%.

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