A private economist has allayed fears of a property bubble formation in the country, despite broad changes in real estate prices in the country.
In a commentary on Tuesday, ING Bank economist Nicholas Mapa said “signs of a real estate bubble have yet to manifest in a palpable manner” as the country’s residential real estate price index remains negative largely due to the pandemic.
Earlier this year, the Bangko Sentral ng Pilipinas (BSP) reported that prices of various types of new housing units in the country contracted by 4.2 percent year-on-year due to the subdued demand for residential properties amid the pandemic.
The latest data on building permits also showed a stark pickup in growth, as driven largely by base effects.
“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,” Mapa said.
“This in turn will aid in the development of areas outside the national capital region [NCR] as the Philippines hopes to undergo some form of deurbanization,” he added.
Earlier this month, BSP Governor Benjamin Diokno announced that the Central Bank is set to release a commercial property price index by the end of this year.
“Together, these two indicators may be used to monitor the developments in the Philippine property sector as a whole and their linkages with the other sectors in the economy,” Diokno told reporters earlier.