While armchair property observers are quick to talk up a Philippine real estate bubble, experts have not seen any evidence of that happening. The Bangko Sentral ng Pilipinas (BSP) noted that demand in the country remains even if preferences were changing. And now a leading economist has reiterated the sentiment.

ING Bank Manila Senior Economist Nicholas Mapa explained that a rise in building permits issued and some segments seeing a price decline was offset by gains being made elsewhere in the market.

“Signs of a real estate bubble have yet to manifest in a palpable manner,” Mapa explained to the Philippine News Agency. “BSP’s residential real estate price index remains negative and previously frothy condominium prices appear to have been deflated by the pandemic. The same report also shows that housing prices outside NCR and for single-detached units have picked up.”

The latter point is important to note. Much of the most recent chatter about a Philippine real estate bubble has been centered around the increase in building permits issuance. Data from the Philippine Statistics Authority showed that residential-related constructions expanded by 102.8 percent in the second quarter of this year when compared to same period in 2020.

However, this was driven by areas outside the National Capital Region (NCR). In fact, Cavite, Laguna, Batangas, Rizal, and Quezon (Calabarzon) account for 25.5 percent of building permits handed out, the highest number in the Philippines.

“This trend suggests that the Philippines is also experiencing the global phenomenon of migration from the urban centers to the areas outside the city with Filipinos in search of more space. After being locked down in the city for more than a year, it’s no surprise that there is now a natural and healthy demand for property and homes outside the city.”

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