Building permit approvals inch up in May

Approved building permits picked up 1.1% year on year in May due to the modest growth in residential construction projects, the Philippine Statistics Authority said in a report.

Preliminary data showed building projects covered by the permits numbered 16,282 in May from 16,105 a year earlier.

This was slightly higher than the 0.6% growth in May 2024 and the revised 8.2% decline in April.

In May, constructions projects covered 3.22 million square meters (sq.m) of floor area, down 17.8% year on year from 3.92 million sq.m.

These building projects that received approval were valued at P42.09 billion, 22.7% lower than a year earlier when it reached P54.48 billion.

The increase in construction signifies growth in economic activity, Emmanuel J. Lopez, professorial lecturer at the University of Santo Tomas Graduate School, said in an e-mail.

“Specifically, a positive increase in investment spending ultimately leading to increase in employment buoyed by increase investment,” he said.

Permits for residential projects, which accounted for almost 70% of the total, rose 10.4% in May to 11,331.

These projects were valued at P21.25 billion, down from P25.67 billion a year earlier.

Applications for apartment buildings climbed 31.7% to 1,397 while applications for duplex or quadruplex homes nearly tripled to 250.

Single homes, which accounted for 85.3% of the residential category, grew 6.3% year on year to 9,664.

On the other hand, nonresidential projects slumped 14.9% year on year to 2,930 permits from 3,443 in May 2024. This accounted for 18% of the total.

Nonresidential projects represented by the permits were valued at P16.80 billion, declining 23.2% from a year earlier.

Meanwhile, approved commercial construction applications contracted 14.5% to 1,994. These made up 68.1% of all nonresidential projects.

Institutional building permits plunged 23.9% to 488, while industrial permits inched up 0.8% to 264.

In May, approved agricultural projects fell 20.7% to 96 while other nonresidential projects picked up 2.3% to 88.

Permits for additions, or construction that increases the height or area of an existing building, declined 17.3% to 546 approvals.

On the other hand, alteration and repair permits totaled 1,086 in May 2025, 17.6% lower from a year earlier and were valued at P2.61 billion.

Calabarzon (Cavite, Laguna, Batangas, Rizal, and Quezon) had the most approved construction projects in May 2025 accounting for 25% of the total with 4,063 permits.

This was followed by Central Luzon (20.2% share with 3,290 permits), and Ilocos Region (8.8% share with 1,425 permits).

Mr. Lopez said that the increase in employment will lead to increase in consumption spending which is a major component of the country’s economic growth.

Source: Business World

Income-price gap keeps Filipino families from owning homes — ULI

Home ownership in the Philippines remains out of reach for many households due to the wide gap between residential property prices and income, particularly in urban areas like Metro Manila and Davao, according to the Urban Land Institute (ULI).

In the 2025 ULI Asia-Pacific Home Attainability Index, the Philippine capital was identified as one of the most expensive livable cities in the Asia-Pacific region.

Condominium prices in Metro Manila are now 19.8 times the median annual household income, far exceeding affordable levels, the Washington, DC nonprofit research and education group said. Townhouses are even more unattainable at 33.4 times the average income.

“Home attainability is still a problem in Metro Manila, to the extent that many families, even those working in one of the capital’s business districts, choose to buy a landed home on the outskirts of the city and commute,” ULI said in the report.

To be considered attainable, median home prices should not exceed five times a household’s annual income, while median monthly rents should take up no more than 30% of their monthly income. Metro Manila and Davao, however, both far exceed these thresholds.

ULI said the average rent for a Metro Manila apartment consumes about 141% of a household’s monthly income. In Davao, rents take up 94% of earnings, still significantly above the affordability benchmark.

While Davao fares better than Metro Manila, home prices are still about 14 times the median income, which ULI described as “scarcely more attainable.”

Data from the Bangko Sentral ng Pilipinas showed that in the first quarter, condominium prices rose 10.6% year on year, while house prices climbed 4.5%.

Amid rising property prices, ULI noted that the development of major railway infrastructure projects has made living outside the capital more attractive to working families, even as commuting remains a challenge.

Ironically, despite high prices, Metro Manila is also grappling with a supply glut of condominiums due to a wave of new projects launched from 2019 to 2023.

Many of these unsold units are in areas outside business districts that were affected by the government’s crackdown on Philippine offshore gaming operators.

“The oversupply is mainly noticeable in the lower-mid segment, where units typically cost between P3 million and P7 million,” ULI said, citing data from real estate consultancy KMC Savills, Inc.

For a studio or one-bedroom condo in this price range, monthly mortgage payments may run from P20,000 to P40,000 ($354 to $708) — a significant burden for Filipino families earning P50,000 to P60,000 monthly.

At the same price, a three- to four-bedroom house outside Metro Manila could be bought, according to the report. “The problem is that many of these condominiums were targeted at middle-class families who prefer a more distant home to a city condo,” it pointed out.

While developers have introduced more flexible payment terms to drive sales, high land acquisition and construction costs have limited their ability to offer significant price cuts.

“Some observers believe this will lead more to explore alternatives such as co-living or multifamily rental use for unsold projects,” ULI said.

To improve affordability, the group urged property developers to cut construction costs and use less expensive land.

“Developers could look at using modular construction to reduce development costs and focus on simple, repeatable designs to ensure faster delivery and therefore lower costs,” Mark Cooper, senior director for thought leadership at ULI Asia-Pacific, said in an e-mailed reply to questions.

“They should consider partnering with local governments to access land more cheaply in return for developing public or affordable housing,” he added.

Across the Asia-Pacific region, ULI said home attainability remains a widespread issue. Only seven of 51 market segments studied offered homes priced within five times the median income. In contrast, rental homes were generally more affordable, with 41 of 51 markets offering rents below 30% of monthly income.

ULI noted that key factors influencing home demand include population growth, aging demographics, household formation, urbanization, immigration, income growth, financing availability and transaction costs.

Source: Business World

10 Trends as Home Attainability Remains Constrained

ULI Asia Pacific has released its 2025 Asia Pacific Home Attainability Index, revealing persistent challenges to affordable or accessible housing across the region. The fourth edition of the report assesses 51 market segments across 41 major cities.

Home attainability in the context of this report means median home prices which are no more than five times median annual household income and median monthly rents which are no more than 30 percent on median monthly income.

“Four years of ULI analysis paint a consistent and concerning picture: attaining affordable and adequate housing remains out of reach for far too many across our dynamic region,” said Alan Beebe, CEO, ULI Asia Pacific. “While rental markets offer a crucial lifeline, the fundamental challenge of purchasing a home persists, particularly in major economic hubs. This year’s Index reinforces that solving this requires government policy, innovative financing, embracing new construction technologies, and practical public-private partnerships focused on delivering diverse housing options at scale.”

“Home attainability remains constrained across the region, despite income growth and price dips in some markets,” said Mark Cooper, Senior Director, Thought Leadership, ULI Asia Pacific and lead author of the report. “This year’s report underscores a deepening divide, with rental housing offering significantly more relief than home purchase, and major cities becoming increasingly exclusive. Hong Kong apartments are still the second most unattainable in the region.”

10 Trends: Asia Pacific’s Housing

1. Home attainability remains constrained across the region: Only seven market segments out of 51 offered home attainability to buyers—homes priced at five times median income or less—in 2024. This is the same number as in 2023. Furthermore, no city in the report scores below four for purchase attainability. Across such a large and diverse region, a crude average of segment attainability scores for 2024 and 2023 is more or less identical (2024: 11.68, 2023:12).

2. Major cities are the most expensive: Only three market segments in major cities across the region offer homes at or less than five times median income: Singapore HDB apartments and apartments in Melbourne and Kuala Lumpur. Singapore is the only capital city to offer attainable homes for purchase.

3. Rental housing is more attainable region-wide: rental homes are considerably more attainable than for-sale properties; 41 out of 51 market segments offer rental homes at below 30% of monthly income. The more expensive segments for rental tend to be in first tier cities in both developed and developing nations, although there are exceptions, such as apartments in Tokyo’s 23 Wards, also known as Tokyo Ku, where rents are only 17% of median income.

The drivers of housing attainability remain the same. Factors affecting demand include population growth, population age profile, household formation, urbanisation, immigration, income growth, the cost and availability of financing, and transaction costs. Factors affecting supply include government provision of housing for sale or rent, the availability and cost of land, the construction materials and labour costs, and the cost and availability of financing, planning regulations, and infrastructure development.

4. Hong Kong scores worst for home attainability: Falling property prices in Hong Kong have made apartments marginally more affordable, they were 23.4 times median annual household income in 2024, compared with 26.5 times in 2022. However, Hong Kong apartments are still the second most unattainable in the region. Meanwhile, average rents are 72% of median monthly income, up from 70% in 2022 and 69% in 2023, as rents have continued to rise.

5. China price drops have boosted attainability, but provided little comfort for buyers: China has seen prices fall in major cities in recent years, but they remain above 10 times household income in all cities covered in this report and above 20 times in Beijing, Shanghai and Shenzhen. Furthermore, the prospect of prices falling further has kept buyers out of the market.

6. Interest rate cuts have boosted attainability in some markets: Lower interest rates in markets including Australia, Korea and China have made buying a home more attainable. However, the interest rate outlook for the region and the world has become more uncertain in 2025, so the cost of borrowing may remain elevated in many markets. Furthermore, lower interest rates are a double-edged sword, as they also drive higher prices.

7. Government policy leads the way: While the private sector is responsible for delivering the bulk of housing in most markets, the single biggest driver of market conditions is government legislation and regulation. This means boosting housing attainability requires public-private partnerships.

8. The Affordability-Accessibility Divide: In developed markets, homes are unattainable because they are too expensive, however in larger developing markets such as India and Indonesia, there remains a shortage of basic housing for millions of people. The Indonesian government estimates that one-third of households do not have access to adequate housing. There, a public housebuilding programme has not been able to keep pace with population growth.

9. Multifamily Housing’s Untapped Potential: The multifamily residential sector is relatively undeveloped in the Asia Pacific region (except Japan), though growing in China and Australia. This report shows that rental housing is more attainable, thus boosting supply will improve attainability. Furthermore, renting remains very affordable in many markets, with rents less than 25% of monthly income. This suggests potential for the real estate industry to deliver more rental properties and the potential for boosted returns.

There is also increasing demand for related rental residential sectors, such as senior living, co-living, and student accommodation. These could provide additional opportunities for real estate investors and developers, which may contribute to overall housing attainability.

10. Tech’s Promise: Adoption of modular construction, 3D printing, and other proptech lags in housing development but holds significant potential to reduce costs and construction times in the future.

Generational Impact

There are also particular demographics in Tier I cities with greater challenges, particularly younger people and young families. In a city such as Hong Kong, where both rents and prices are high, it is difficult for younger people to save enough to buy a home. Meanwhile, in many cities, elderly people find housing just as unattainable as their younger fellow citizens. There is clearly potential for further investigation of the housing challenges which face different generations.

ULI HAI Report 2025_Finalised_9 July.pdf

Download PDF • 9.17MB

Source: Urban Land