Factors that Affect the Real Estate Market Value in the Philippines

Factors that Influence the Market Value of Philippine Real Estate

Whether selling or purchasing a property, knowing how to calculate the real estate market value is vital to prevent legal disputes, investment pitfalls, or being at a disadvantage. Various factors influence the market value of a property. Investors and property owners should know these factors to make well-informed decisions before closing a deal.
 
Thus, we’ve listed below the factors that affect the real estate market value in the Philippines, which will benefit investors and those planning to sell their properties.

5 Factors that Affect the Real Estate Market Value in the Philippines

1. Economy

One of the top factors affecting the real estate market value in the Philippines is the country’s economy. It is commonly calculated based on different economic indicators, such as the gross domestic product (GDP), employment, manufacturing enterprises, and cost of services and goods. Generally speaking, real estate will be stagnant if the economy is sluggish.
 
The market value of real estate properties declines when the economy is in recession. On the contrary, many capitalists opt to invest during this time since they can purchase property at a lower value. Hence, buying a property when the economy is stagnant is a wise investment decision.

2. Location & Accessibility

Another factor that significantly affects market value is the location and accessibility of the property. Regardless of function, location is critical when choosing a property. For instance, if investing in commercial properties, buy land in an urbanized and well-developed area, especially with great transport systems.
 
However, if you prefer a resort or resthouse, look for a location ideal for retirement or away from the hustle and bustle of big cities, such as mountainside or beachside properties. Accessibility is also a major factor in real estate. Properties near hospitals, schools, shopping malls, public markets, and central business districts tend to have higher market value.

3. Features & Amenities

The property's market value will also based on its features and amenities, like parking, swimming pools, and open and green spaces. A property that offers security, privacy, and smart technology is attractive to many buyers, especially for younger generations — the same way avant-garde facilities make properties more valuable.
 
The property’s value can also increase depending on its decorative features, from granite flooring and marble bathtubs to opulent lighting devices, floor-to-ceiling windows, and HVAC systems. So, if you’re eyeing a fully furnished modern condo unit or a house in a gated community, expect the property’s market value to be pricier.

4. Size, Layout, & Condition

Home buyers and investors have various specification requirements considering their intended use. Some prefer properties with spacious interiors, ample parking areas, or wide open spaces. Others opt for minimal, modern, and functional spaces. That’s why the size and layout of the property matter when calculating market value.
 
Properties with extensive green spaces will likely attract those in the agricultural business or buyers investing in recreational facilities. Meanwhile, many home buyers today prefer a minimalist lifestyle, making condo units in demand. Additionally, the property's condition has a huge effect on market value. The property's value is reduced if neglected and requires repair of structural issues.

5. Interest Rates

Apart from the economic conditions, supply, and demand, interest rates significantly influence the real estate market value. If the interest rates are low, the mortgage value will also be lower. Interest rates also change every year. When the interest rates increase, the borrowing cost will also go up. So, buyers will back out of the market, resulting in less demand and lower prices.
 
But for experienced investors, this downturn is a profitable opportunity. Therefore, interest rates directly affect the property’s market value.