The Philippines’ new upper middle-income status may have boosted its global economic standing, but for many aspiring homeowners, the dream of owning a house remains stubbornly out of reach.
That is the message from Leechiu Property Consultants, which said the country’s reclassification by the World Bank strengthens its long-term investment story but does little to narrow the widening gap between household incomes and residential property prices.
“People ask, ‘Richer on paper, but does it translate in practice?’ That’s the confusion many felt following the World Bank announcement,” said Tam Angel, director for investment sales at Leechiu Property Consultants.
Leechiu’s data paint a stark picture. Between 2019 and 2025, household incomes in the National Capital Region rose just 20 percent, while residential property prices surged 62 percent. The result is a 42-percentage-point affordability gap that has steadily pushed homeownership further from the reach of many middle-income Filipinos.
“The Philippines may now be an upper middle-income country, but our buying power has not kept pace,” Angel said. “Higher interest rates have only widened the affordability gap, making homeownership more difficult despite the country’s stronger economic fundamentals.”
The disconnect highlights a broader challenge confronting the property market. While the World Bank’s reclassification enhances the Philippines’ appeal to investors by signaling stronger macroeconomic performance, it does not automatically translate into higher disposable incomes or improved purchasing power for households.
One bright spot, Angel said, is the increase in the maximum housing loan under the Home Development Mutual Fund to P10 million, a move that expands financing options for middle-income buyers.
“Pag-IBIG continues to offer the most affordable path to middle-market homeownership,” he said.
Even so, Leechiu believes affordability, rather than demand, will remain the defining issue for the residential sector.
Demographics, overseas remittances, urbanization, and a growing consumer base continue to support long-term housing demand, but until wage growth begins catching up with property values, the country’s new economic label may feel more meaningful to investors than to families still saving for their first home.
