Around 9.2 percent of Filipino households say that they intend to purchase a residential unit in the next 12 months, according to the latest Consumer Expectations Survey by the Bangko Sentral ng Pilipinas (BSP) covering the third quarter of 2018.
That’s only slightly less than the 9.3 percent figure in the previous quarter, as well as the 9.8 percent figure a year ago.
Surprisingly, the figure has held up rather well amid the steep decline in consumer confidence.
The BSP’s overall consumer confidence index, a measure of Filipinos’ sentiment on how their households are faring financially and economically, fell to -7.1 in the third quarter of 2018 from 3.8 in the previous quarter. That’s the lowest the index has dropped since the fourth quarter of 2015, when it stood at -8.1.
The pessimistic turn in consumer sentiment is also evident in the respondents’ answer when asked if they consider the current quarter a good time to buy real estate. Only 33.2 percent of respondents said they do, as opposed to 39 percent in the previous quarter and 37.5 percent a year ago. Other big-ticket items also saw similar declines.
“Respondents cited prioritization on food and other basic needs, high prices and low or insufficient income as reasons for their less favorable outlook on buying conditions,” wrote the BSP in the report.
Yet, Filipino households’ plans to buy a house a year from now seems to be unaffected by current pessimism, which is being largely driven by rising inflation, which soared to a nine-year high in August.
Similarly, overseas Filipino workers (OFW)’s families’ house-buying behavior also seem to be unaffected by prevailing consumer pessimism. The BSP survey found that 11.8 percent of OFW households intend to use part of remittances in purchasing a house, much higher than 8.7 percent in the previous quarter. But it is lower than the 14.5 percent figure in the third quarter of 2017.
For the third quarter’s Consumer Expectations Survey, the BSP received responses from over 5,400 households across the country. Of these, 449 households said that they receive OFW remittances.
Lorenzo Kyle Subido is a staff writer of Entrepreneur PH