Higher price ceiling for mass housing to attract developers

CEBU, Philippines — More socialized housing units are expected to float in the market following the government’s move to update the price ceiling for the mass housing segment.

Developer Jose Soberano III expects more property companies like Cebu Landmasters Inc., (CLI) to build housing projects for the masses. However, the challenge of finding the right location remains to be a challenge.

In an interview with Soberano, he said that the adjustment of price ceiling for socialized housing would encourage companies to support the government’s desperate move to address the housing backlog in the country.

The Philippine government is looking at increasing the price cap for socialized housing from P480,000 to P1.8 million for vertical projects to cater to the Pambansang Pabahay Para sa Pilipino (4PH) Program.

“With this kind of (price) ceiling, this will encourage more developers to build. This is very favorable for developers because you are hitting the level of the economic side of the market,” he said adding that  the adjustment will encourage more real estate players to serve the mass market as it will now be economically viable for them, thus helping the country solve its six million housing backlog.

The adjusted price ceiling only applies to vertical projects with 10 floors and above.

Soberano, who is the chairman and chief executive officer (CEO) of Cebu Landmasters Inc., (CLI) added that his company is seriously pursuing socialized or affordable housing projects.

Real estate players and groups have been asking the National Economic and Development Authority and Department of Human Settlements and Urban Development to increase the price cap for socialized housing as cost of construction materials and labor have changed over the years.

Soberano said the previous price ceiling was a challenge for developers to even break even.

Under the current price ceiling law, the price for a 22-square-meter (sq.m) socialized horizontal housing unit was P480,000. A 24-sq.m. property cost P530,000 and  a 28-sq. m. unit is at P580,000.

Soberano admitted that choosing locations would now be a challenge for developers.

“We have to make sure that the locations would be convenient to the target market and at the same time affordable,” he said. — (FREEMAN)