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In other countries, real estate markets have a clear reference for “done” prices—actual transacted values—which serve as a fixed basis for tracking price movements. For instance, when real estate prices plunged in the US during the global financial crisis, the drop was quantified as a percentage decrease from “done” market values, often tracked by tools like the Case-Shiller Price Index.
In the Philippines, however, it’s a completely different ballgame. We lack a universally accepted benchmark for “done” prices. To make sense of our pricing spectrum, here’s a breakdown of how price levels are typically structured:
PH Hierarchy of Real Estate Price Levels (arranged from highest to lowest)
1. Developer’s Price
+ The highest value on the spectrum, often non-negotiable.
2. Secondary Market Price (Asking Prices)
+ Sellers’ published asking prices, which are usually 90% negotiable.
3. Market Value (Done Prices)
+ The actual transacted prices—unpublished and often opaque.
4. BIR’s Market Value (Zonal Value)
+ Government-determined values, updated roughly every three years.
5. LGU Market Value (City Assessor/Tax Declaration Value)
+ A fraction of done or zonal values, rarely updated due to political sensitivity. However, this might change with the implementation of the Real Property Valuation and Assessment Reform (RPVAR).
So, when someone says “prices will crash,” the question is: from which reference point?
+ Is it an X% drop from Developer’s Prices?
+ From Asking Prices?
+ Or even from the Zonal Value?
Stay tuned for more insights tomorrow.