Market appetite for big-ticket items seen growing
Increasing number of Filipinos buying own homesBy Michelle V. Remo
Philippine Daily Inquirer
Demand for residential property is seen to further increase over the short term as rising incomes prompts more Filipino households to buy their own homes, the Bangko Sentral ng Pilipinas said.
Citing results of its latest survey on the buying intentions of Filipino households, the BSP said consumers’ appetite for big-ticket purchases, particularly house and lot, improved in the first quarter from year-ago level.
Of the respondent-households, 7.2 percent said they intended to buy house and lot within the next 12 months. This is higher than the 5.3 percent growth recorded in a similar survey in the first quarter of 2012.
“Consumer outlook on buying conditions was most upbeat for real estate. Respondents were of the view that real property is a good investment,” the BSP said in a report on the survey.
The survey, which was conducted nationwide from Jan. 21 to Feb. 3, had 5,670 respondent-households and a response rate of 96.9 percent.
For more than three years now, demand for residential property has been rising. This is on the back of the steady inflows of remittances and a favorable outlook on the Philippine economy.
According to the BSP, income security provided by overseas employment helps boost the confidence of Filipino households to buy big-ticket items. At least 10 percent of Filipino households are said to be partly or fully dependent on remittances from migrant workers.
Besides house and lot, motor vehicles are becoming more in demand because of the improving incomes of many Filipino households.
Results of the same survey showed that 3.8 percent of the respondents intended to buy motor vehicles over the next 12 months, up from 2.9 percent a year ago.
The survey results are consistent with the robust increase in demand for housing and auto loans from banks.
The BSP and banking industry players expect consumer loan demand to grow by double-digit rates this year.
Believing that the Philippine economy will perform favorably and that incomes will be steady or further increase, many households are in the mood to buy big-ticket items with the help of bank loans, the BSP said.
The sustained rise in demand for residential property and the corresponding robust pace of increase in bank loans have elicited concerns that the Philippines may be headed to an asset price bubble.
However, the BSP said it was not seeing any significant signs of an asset price bubble so far. It acknowledged though the need for banks to exercise prudence in lending.
Recently, banking industry players, with help from the BSP, formulated a manual for the extension of housing loans. The manual covered the payment capacity of borrowers and appropriate payment terms. It also states that housing loans should be extended only if the real estate developers concerned are accredited by banks.