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Thursday, July 25, 2024

Manila the second least affordable housing market in Asia

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Connet Santos and her family have been renting an apartment for two decades as they could not save enough funds to buy a house in one of the least affordable property markets in Asia.

Santos, a 45-year-old housewife and mother, says that while they have been long planning to buy their dream house in Antipolo City, a suburb east of Metro Manila, it had to wait.

“Even though we wanted to move from our apartment, we had to set aside our dream and prioritize our basic needs, especially as we have children who go to school.  Job security is also a concern nowadays,” she says.

Ashley Orlina, 21, thinks her parents are not compensated enough to afford a house. “I feel that my mother is overworked.  She comes home at 4 a.m. and leaves for work at 5 p.m.  She has been working for more than eight hours a day, and yet her income is not enough,” she says.

The third-year college student says their family has been dreaming of owning a house, but their savings are not enough to meet the required down payment and monthly mortgage.  “There are also other expenses such as school tuition that may parents have to pay besides rent,” says Orlina.

UK-based mortgage company Online Mortgage Advisor ranked Manila as the second least affordable city in terms of housing in Asia, next only to Mashhad in Iran. It analyzed property prices all over Asia to see how much they have outgrown local wages in the last five years.

Sophie Macatlang, a 21-year-old student living in Makati, thinks that their monthly condominium rent is too expensive.  She says the average rent for a studio condominium unit in Makati is between P18,000 and P25,000.  This is higher than the monthly income of a minimum wage earner at less than P15,000.

Reychard Carpio, 53, believes that properties in Metro Manila are overpriced. “Take a small condo unit for example, it is so expensive,” he says.

Maribeth Alminar of Pasig says she intends to buy a property once her savings are sufficient.  She says at present, a big chunk of her income goes to monthly rent.

“Manila is the second least affordable city to buy property in Asia, worse than property hotspots such as Riyadh in Saudi Arabia, Taipei in Taiwan and Seoul in South Korea,” says the report of Online Mortgage Advisor.

Online Mortgage Advisor compared the average price of one square meter of an apartment in the city center of Manila to the average annual salary in 2016 and 2020.

The changing cost of purchasing in cities in Asia was based on Numbeo's latest raw figures on city affordability. It considered apartment price (one-bedroom) in a city center; average monthly net salary (after tax); price per square feet to buy an apartment in a city center; and the average salary of local workers.

Mortgage rates were sourced from on a mortgage length of 30 years and 20-percent down payment.

It reveals that Manila residents could afford 2.76 fewer meters of housing space in 2020 than in 2016. Manila has become 64-percent less affordable for renters since 2016, it says.

Manila workers can afford to buy 4.2 square meters of house space in 2016, but this fell to 1.5 sq. m. in 2020. The figure shows Manila is worse than Riyadh in Saudi Arabia, Taipei in Taiwan, and Seoul in South Korea, according to Online Mortgage Advisor.

Manila also ranked as the third worst city for renting affordability in the region, next to the Iranian cities of Tehran and Mashhad.

The average rental price of a property in Manila equated to 90 percent of an average local's monthly salary in 2016. “This jumped to a staggering 154 percent in 2020,” says the report. Mary Beatrice L. Umlas


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