Real estate price index: a model for the Philippines

Land is a key asset in wealth creation. It is one of the three sources or factors of production. Since 2008, Cebu City have experienced continued real estate boom and urban growth. Growth begets a myriad of problems such as traffic congestion, housing backlog and unemployment. Land values are possibly the most fundamental factor in urban development planning. Understanding the determinants of land value is a basic requirement in policy making and in addressing the problems. This study will examine the 31 determinants of land value such as accessibility to transportation, neighborhood, distance to city center, neighborhood and others. The data set used were a result of a survey conducted with 52 real estate practitioners, valuers, assessors randomly selected and uses a 5 likert scale questionaires as a tool In analysing the data set, the research uses factor analysis, principal component analysis and multiple regression with SPSS. In arriving at the ranking of the factors in land values, the study assigned as dependent variable land value data obtained from the Bureau of Internal Revenue (BIR) zonal valuation.Based on the analysis made in this research, the priority and ranking can be categorized into mobility (accessibility to public transportation), livability (open space and parks, neighborhood, recreational facilities, environmental quality), economic (accessibility to employment, rental income), government regulation and taxation (zoning and government assessment and charges), and ownership. Findings of this research could be helpful in urban planning policy and decision-making processes. In particular urban planners, investors, land owners, brokers, valuers could use this model to evaluate the current situation and helps in determining residential land prices.

PLANNING MALAYSIA, 2021

Housing is a country’s biggest asset. Hence, the pattern of the housing price index (HPI) is an important topic to gain insight into the housing market while identifying the prevailing housing issues. The determinants of housing price vary for each city and state based on the different characteristics in each location. Accordingly, HPI should consider the property’s quality differences. Besides, national HPI is insufficient and restricted to the housing price at the state level. Thus, the study focused on constructing a specified HPI model for different cities, districts, and states. Effective HPI can give parties a better idea of the current property market situation and act as an analytical tool in managing the sector. Specifically, the study aims to examine the relationship between the heterogeneity housing attributes and housing prices of the terraced properties in Johor Bahru, Malaysia. Additionally, the study provides detailed information on the key determinants of the housing...

Decision Science Letters

The property is a unique product that cannot be contrasted with other commercial products due to pricing conditions. Property price determination is one of the crucial aspects of property development activities because of the profit margin made by the developer and the purchasing preferences. This study attempts to extend the literature that has largely focused on factors of housing prices in developed markets and provided recent evidence of housing price determinants in two countries (i.e., Indonesia and Malaysia). Thus, this study examines the factors affecting housing prices in Jakarta Metropolitan Region and Greater Kuala Lumpur. A quantitative approach was used involving two countries, namely Indonesia and Malaysia. The data was collected using a survey questionnaire through purposive sampling. A total of 100 respondents (Indonesia) and 134 respondents (Malaysia) participated in this study. The data was analyzed using descriptive (frequency) and inferential statistics (chi-squa...

2011

In modern portfolio theory, real estate can reduce substantially the total risk in a portfolio. Therefore, a flaw in the aggregate real estate index would cause a tremendous consequence for all the stakeholders in the industry. In general, there are two major approaches in producing property indices: the appraisal-based and the transaction-based approach. The transaction-index approach is more statistical or econometric in nature, tending therefore to be more formally explicit and objective or transparent in its application procedure. Hedonic regression model is considered as the most suitable for constructing cross-sectional quality adjusted house price indices. The author thus has chosen the hedonic regression model in the empirical part as the opponent method against the Official method, the one which is adopted by the Ministry of Construction of Vietnam. The results show the Official index has a different pattern compared to the indices derived from hedonic and other models. Due...

Addressing the problems of the real estate industry enhances and creates positive policy implications and societal contributions.This paper described the profile of the real estate human resources. It also described the problems encountered by the respondents. Further, policy implications and societal contributions of real estate industry were identified. Descriptive method was used in this paper. A total of 239 human real estate resources (163 males and 76 females) were surveyed using a questionnaire. In relation to the gathered and analyzed data, this research has concluded that, first, the top three most common problems encountered by the real estate industry were unlicensed real estate persons, commissions received, and unethical practices. In spite of the presence of RA 9646, individuals are not yet aware of its implementing rules and regulations. It projects the traditional selling and buying of properties which sometimes caused problems to stakeholders. Second, these problems encountered have policy implications on the real estate industry such as land conversion, areas prone to calamity and hazards, and hidden charges upon turnover. Policy implications from different situations were generated such as from different government agencies. And last, despite of these problems and policy implications, real estate industry has societal contributions such as it can be a source of employment for the people, provides shelter to the people for social protection and security, and it is one of the sources of the government's income. Jobs generated, taxes collected and social housing shared by the real industry are the major contributions of the real estate industry. The researcher recommends that Information dissemination for the awareness of RA 9646 for the professionalism of the industry must be participated for the benefit of the stakeholders. Implementation and proper monitoring of this law through authorized group improve the professionalism in the industry. Vigilant buyers and seeking necessary information before investing hard earned money in real properties must be done by prospective buyers in order to prevent future problems. Income generated from assessors can be improved over the years through proper payments on real property tax. Following the proper land use must be practiced in order to get the highest and best use of the property.

IFC Bulletins chapters, 2013

However, the construction of such a tool faces many difficulties related mainly to the nature of this asset. Indeed, the housing market shows great heterogeneity, making the adoption of a uniformed approach extremely challenging since prices of different properties are influenced by intrinsic characteristics such as the surface area, number of rooms, age, geographical location...etc. In addition, a property represents a durable asset that rarely changes its owner, making the assessment of prices fluctuations difficult. This large discrepancy between the purchase and resale of the same property complicates the construction of a price index.

CERN European Organization for Nuclear Research - Zenodo, 2022

Addressing the cause of escalating housing prices in the time of the COVID-19 pandemic is relevant but timely. Housing is both a consumption and an investment good and for many Filipinos, it is a dream worth going abroad for. This thesis studies the housing prices in the Philippines between 2000 to 2020. The overall objective of this thesis is to answer whether important macroeconomic factors can explain these housing prices. Using an econometric model, the Engel-Granger two-step approach captures the dynamic of long-and short-run relationships of the variables. The co-integration test result shows that GDP per capita is positively associated with housing prices by 1.24% in the long term, the inflation rate by 0.08%, and unemployment rate by 0.398%. Furthermore, the error correction model results show that GDP per capita negatively affects the housing price by 0.075% while the interest rate negatively affects it by 0.01497%. Error correction model result shows that short-term and long-term deviation in the previous level can be adjusted by 11% in the subsequent nine periods. Among the variables that affect housing prices, the GDP per capita has the most significant effect size. This thesis seeks to offer its findings that strongly suggest that policy makers need to pay close attention to the effect of the GDP per capita on housing prices and thus provide policies that adopt in various time horizons.

2011

Land valuation using the International Valuation Standards (IVS) was just adopted in the Philippines in October 2009 as reflected in its first edition of Philippine Valuation Standards. Part of the adoption however, is the question whether the valuation approaches namely; the market or sales comparison, income and cost approaches specified in the standards are readily applicable for land valuation purposes. This study aimed to determine the applicability of the said approaches. This was conducted in Leyte, Philippines with a total of 164 agricultural land samples being estimated. Based on the actual experience of the researcher and the available circumstances in the study areas, the income approach, in general, provided the most credible estimate of market values of all the samples because it has so far had the most complete information needed for the analysis. Results of the other approaches were not very reliable because of lack of needed information to support its estimation. For...