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The Dynamics of Housing Demand in the Philippines: Income and Lifecycle Effects

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  • Ballesteros, Marife M.

Abstract

This paper examines the housing consumption pattern of households in the Philippines given their socioeconomic characteristics and the existing conditions in the land and housing market. Two basic issues are examined: one, how is housing adjustment and expenditure associated with income and demographic changes; and two, do housing consumption in the country suggest the presence of significant housing market imperfections or capital market imperfections. The results point to the lack of housing alternatives specifically for the low-income households in the formal housing market. Housing adjustments and the path toward acceptable housing are thus constrained. Estimates of income elasticity show that for most households, an increase in income will not be spent on housing but to meet other basic household needs. This being the case, there has to be a significant increase in income to bring about a significant change in housing conditions. In the long run, economic development may bring about the needed boost in income, however, in the short-run, government has look into alternative forms of low-cost housing. One option is developing the low-cost rental market. Another option is finding innovative financing schemes that would allow low monthly amortization. Lastly, government has to institute ways to effectively reduce the high cost of housing in the country.

Suggested Citation

  • Ballesteros, Marife M., 2001. "The Dynamics of Housing Demand in the Philippines: Income and Lifecycle Effects," Discussion Papers DP 2001-15, Philippine Institute for Development Studies.
    • Handle: RePEc:phd:dpaper:dp_2001-15
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    References listed on IDEAS

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    1. Mahlon R. Straszheim, 1975. "An Econometric Analysis of the Urban Housing Market," NBER Books, National Bureau of Economic Research, Inc, number stra75-1.
    2. Malpezzi, Stephen & Mayo, Stephen K, 1987. "The Demand for Housing in Developing Countries: Empirical Estimates from Household Data," Economic Development and Cultural Change, University of Chicago Press, vol. 35(4), pages 687-721, July.
    3. Orbeta, Aniceto Jr. C. & Llanto, Gilberto M. & Sanchez-Robielos, Maria Teresa & Tang, Marie Christine, 1998. "A Study of Housing Subsidies in the Philippines," Discussion Papers DP 1998-42, Philippine Institute for Development Studies.
    4. Smith, Lawrence B & Rosen, Kenneth T & Fallis, George, 1988. "Recent Developments in Economic Models of Housing Markets," Journal of Economic Literature, American Economic Association, vol. 26(1), pages 29-64, March.
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    6. Richard F. Muth, 1971. "The Derived Demand for Urban Residential Land," Urban Studies, Urban Studies Journal Limited, vol. 8(3), pages 243-254, October.
    7. Friedman, Joseph & Jimenez, Emmanuel & Mayo, Stephen K., 1988. "The demand for tenure security in developing countries," Journal of Development Economics, Elsevier, vol. 29(2), pages 185-198, September.
    8. Ballesteros, Marife M., 2000. "Land Use Planning in Metro Manila and the Urban Fringe: Implications on the Land and Real Estate Market," Discussion Papers DP 2000-20, Philippine Institute for Development Studies.
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    Cited by:

    1. Doling, John & Vandenberg, Paul & Tolentino, Jade, 2013. "Housing and Housing Finance—A Review of the Links to Economic Development and Poverty Reduction," ADB Economics Working Paper Series 362, Asian Development Bank.
    2. Deuchert, Eva & Felfe, Christina, 2015. "The tempest: Short- and long-term consequences of a natural disaster for children׳s development," European Economic Review, Elsevier, vol. 80(C), pages 280-294.
    3. Cacnio, Faith Christian Q., 2001. "Microfinance Approach to Housing: The Community Mortgage Program," Discussion Papers DP 2001-28, Philippine Institute for Development Studies.
    4. Ayaz Ahmad & Nasir Iqbal & Rehana Siddiqui, 2018. "Determinants of Housing Demand in Urban Areas of Pakistan: Evidence from the PSLM," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 57(1), pages 1-25.
    5. Phanida Roidoung, 2013. "Factors of housing decisions for low and middle-income households in the greater Bangkok area," The Empirical Econometrics and Quantitative Economics Letters, Faculty of Economics, Chiang Mai University, vol. 2(3), pages 13-26, September.
    6. Eva Deuchert & Christina Felfe, 2013. "The Tempest: Natural Disasters, Early Shocks and Children's Short- and Long-Run Development," CESifo Working Paper Series 4168, CESifo.
    7. Dasgupta,Basab & Lall,Somik V. & Lozano Gracia,Nancy, 2014. "Urbanization and housing investment," Policy Research Working Paper Series 115004, The World Bank.
    8. Rebeca Fontanilla Andong & Edsel Sajor, 2017. "Urban sprawl, public transport, and increasing CO2 emissions: the case of Metro Manila, Philippines," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 19(1), pages 99-123, February.
    9. (No last name available), Himanshu, 2013. "Poverty and Food Security in India," ADB Economics Working Paper Series 369, Asian Development Bank.
    10. Debuque-Gonzales, Margarita, 2013. "Empirical Determinants and Patterns of Research and Development Investment in Asia," ADB Economics Working Paper Series 364, Asian Development Bank.
    11. Ballesteros, Marife M., 2001. "Benefits (and Losses) From Rent Control in the Philippines: An Empirical Study of Metro Manila," Discussion Papers DP 2001-23, Philippine Institute for Development Studies.
    12. Prince Christian R. Cruz, 2008. "Transaction Costs and Housing Affordability in Asia," International Real Estate Review, Global Social Science Institute, vol. 11(1), pages 128-150.
    13. Ballesteros, Marife M., 2004. "Rental Housing for Urban Low-Income Households in the Philippines," Discussion Papers DP 2004-47, Philippine Institute for Development Studies.

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