Why Filipinos prefer renting according to BSP

A significant shift is taking place in the housing landscape of the Philippines, with an increasing number of Filipino families opting to rent rather than buy homes. This trend, most evident in Metro Manila, is driven by high property prices and slow wage growth, making homeownership increasingly out of reach for many.

According to the Bangko Sentral ng Pilipinas (BSP) Consumer Finance Survey, 11.3 percent of households nationwide were renting in 2021, up from 10.2 percent in 2018. The trend was most pronounced in the National Capital Region (NCR), where 34.9 percent of respondents reported renting their homes.

Meanwhile, homeownership remained high in other parts of the country. Outside Metro Manila, 73.9 percent of families owned or co-owned their residences. This stark contrast reflects the widening affordability gap, particularly in urban centers like Metro Manila.

In fact, homeownership in Metro Manila was significantly lower, at just 43.9 percent. Even during the pandemic, residential property prices grew by 4.9 percent in the last quarter of 2021, according to BSP data. The growing costs of owning a home in Metro Manila are compounded by stagnant wages, further pushing many families toward renting.

Despite the rising trend of renting, homeownership remains prevalent in the Visayas and Mindanao, where real estate prices are more affordable. Still, the issue of housing affordability is far from being resolved, especially in major urban centers.

The BSP survey also provided insights into the financial portfolios of Filipino households. Non-financial assets, such as home appliances and vehicles, remain the cornerstone of Filipino wealth. According to the survey, 96.6 percent of households owned home appliances, while mobile phones (92.8 percent) surpassed televisions (81.1 percent) as the most common household items. Residential properties, which 69.9 percent of households owned, ranked second, followed by vehicles (35.3 percent), with motorcycles (61.7 percent) being the most popular type.

In terms of financial assets, deposit accounts were the most widely held, with 35.3 percent of households reporting ownership. This was followed by cash savings kept at home (28.7 percent) and e-money accounts (24.3 percent), indicating a growing shift toward digital financial transactions.

Why renting is gaining popularity

For many Filipinos, renting offers a more flexible and practical option compared to buying a home. Marian Efondo, a government employee, shared, “Buying a house feels like a huge commitment and financial responsibility. It ties you down to a permanent place, which isn’t ideal for me yet, especially since I’m still figuring out a lot of aspects in my life. Renting, on the other hand, keeps things flexible in case I decide to make a career change or relocate.”

Will Obcemea pointed out that their decision was driven by the proximity to work and the risks associated with purchasing a unit. “We understood that there is more risk involved in buying, especially since the building we’re in is only on a lease. Based on previous experiences in the family, when the landlord and the actual owner of the land are not the same, it’s almost always certain that once the lease is up, you’ll have to look for a new place,” he said. He also highlighted the financial advantage of renting, noting that the cost of renting was much cheaper than purchasing the property in the long run.

For younger workers like Kenn Fernandez, renting is a practical step while they are still starting out in their careers. “Since I’ve only been working for two years, I can’t afford to buy a house yet, and I’ve just recently settled in my permanent job. Renting is a good option for now, especially since I’m living with my college friends, and it helps us support each other as we begin our careers,” he explained. Kenn added that renting has helped him develop important life skills like budgeting and cooking, which might not have been as necessary if he had stayed with his parents.

Jeanne Felice, a young professional with family responsibilities, echoed similar sentiments. “Right now, renting fits my budget, especially since I have siblings to support, and my salary is still not enough to afford a house. But I plan to work towards buying one in the future,” she shared.

Roma Balbuena-Alcosaba, another renter, emphasized the affordability and low maintenance of renting. “We prefer renting because it’s cheaper than paying a mortgage or owning a house. The property owner takes care of the maintenance and repairs, which makes it more convenient for us.”

Camille Bolos shared a similar practical perspective, “Renting is more affordable for me, especially since I’m staying in a bedspace. It costs less than owning a place near my office.” She also mentioned that she has a home back in the province. “I have a house back in the province that I can return to anytime. I’d prefer working closer to home, but job opportunities are limited there, unfortunately.”

Maan D’Asis Pamaran, a mother balancing work and family, explained her reasons for renting as well. “I find it more convenient to rent because I need to be close to my workplace and my sons’ schools. The houses in my price range are too far from where we need to be, and I have to consider traffic, travel time, and transportation costs. Once the nearby provinces become more accessible through public transport, I might consider buying a house there.”

Bernard Reyes, too, shared how renting fits his lifestyle: “Renting gives me the freedom to allocate my hard-earned money towards other things, like travel. Plus, it’s a good way to save up for a permanent property in the future, whether it’s land or a house.”

The future of renting and homeownership

As Metro Manila continues to experience rising real estate prices, renting is becoming an increasingly viable option for many Filipinos. While some still dream of homeownership, the financial burden of buying a home — especially in urban centers — remains a significant challenge. For many, renting offers flexibility, affordability, and a practical solution for the time being, with the possibility of purchasing a property in the future once their financial situation improves.

The growing trend of renting reflects a broader shift in the housing market, where affordability and accessibility remain major concerns for Filipino families. Until these issues are addressed, renting will likely continue to be the preferred option for many, especially in Metro Manila, where the cost of living remains high.