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Writer's pictureGabriel Mikael

Building Now (2024)

A competitive analysis and market research on house construction costs today vs. next year in the Philippines requires an understanding of current market conditions, inflationary pressures, supply chain dynamics, and expected future trends. This analysis will help determine whether it’s more cost-effective to build a house now or wait until next year.


1. Current House Construction Costs (2024)

  • Average Construction Cost (per square meter):

    • ₱25,000 – ₱60,000 depending on the type of home:

      • Basic Finishes: ₱25,000–₱35,000 per sqm (for low-cost housing)

      • Standard Finishes: ₱35,000–₱50,000 per sqm (for mid-range homes)

      • High-End Finishes: ₱50,000–₱60,000+ per sqm (for luxury homes)

  • Total Construction Costs for a 100 sqm House:

    • Basic: ₱2.5M–₱3.5M

    • Standard: ₱3.5M–₱5M

    • High-End: ₱5M–₱6M+


Key Factors Affecting Construction Costs in 2024:

  1. Materials Prices:

    • Cement: ₱220–₱250 per bag.

    • Steel: ₱75,000–₱80,000 per ton.

    • Timber/wood: ₱35,000–₱45,000 per cubic meter.

    • Tiles, glass, and fixtures: Prices have been relatively stable but could be influenced by supply chain issues.

  2. Labor Costs:

    • Skilled Labor: ₱800–₱1,200 per day.

    • Unskilled Labor: ₱600–₱800 per day.

    • Foreman: ₱40,000–₱60,000 per month.

  3. Interest Rates:

    • Mortgage interest rates are currently 6%–8%, depending on the bank and loan type. Rising interest rates due to central bank policies can significantly affect the overall cost of building a home if you plan to finance it with a loan.

  4. Government Projects:

    • Ongoing infrastructure projects under the government's "Build, Build, Build" program may increase demand for materials and labor, pushing up prices.


Projected Construction Costs for Next Year (2025)

1. Material Cost Inflation (2025)

  • Inflationary Pressures: Material prices are expected to rise due to:

    • Global Supply Chain Issues: Ongoing challenges in global shipping, especially for imported materials (e.g., steel, glass, and high-quality wood), will likely drive up prices.

    • Fuel and Energy Costs: Rising energy prices affect the production and transportation costs of construction materials.

    • Foreign Exchange Rates: A weaker peso may increase the cost of imported materials like steel, cement, and specialized fixtures.

    • Projected Increase: Construction material costs are expected to rise by 5%-10% by 2025.

  • Examples:

    • Cement: ₱250–₱275 per bag.

    • Steel: ₱80,000–₱88,000 per ton.

    • Timber: ₱38,000–₱50,000 per cubic meter.

2. Labor Cost Projections

  • Labor wages are expected to increase due to inflation and rising demand for skilled labor:

    • Skilled Labor: ₱900–₱1,300 per day (+5%–10% increase).

    • Unskilled Labor: ₱650–₱850 per day.

    • Foreman: ₱45,000–₱65,000 per month.

  • Labor shortages in specific areas (especially urban centers like Metro Manila, Cebu, and Davao) may exacerbate wage increases, pushing project costs up by an additional 5%-7%.


Comparative Cost Breakdown: Today vs. Next Year

Category

2024 Costs (Today)

2025 Projected Costs

Expected % Increase

Materials (per sqm)

₱25,000–₱60,000 (depending on finishes)

₱27,500–₱66,000

5%–10% increase

Skilled Labor (per day)

₱800–₱1,200

₱900–₱1,300

5%–10% increase

Unskilled Labor (per day)

₱600–₱800

₱650–₱850

5% increase

Foreman (per month)

₱40,000–₱60,000

₱45,000–₱65,000

5%–8% increase

Steel (per ton)

₱75,000–₱80,000

₱80,000–₱88,000

7%–10% increase

Cement (per bag)

₱220–₱250

₱250–₱275

5%–8% increase

Total Construction Costs

₱2.5M–₱6M (for 100 sqm house)

₱2.75M–₱6.6M

Overall increase of 5%–10%

Reasons to Build Now vs. Next Year

Building Now (2024)

  1. Avoid Rising Material Costs: Material costs are expected to increase by 5%-10% due to inflation and global supply chain issues. Locking in today’s prices can save you significant amounts.

  2. Lower Labor Costs: Labor costs are also expected to rise, driven by inflation and growing demand. By building now, you can secure labor at today’s rates before wages increase.

  3. Stable Interest Rates: Current mortgage rates range from 6%-8%, but central bank policies might increase interest rates further next year. Locking in a loan at today’s rates could save you on overall financing costs.

Building Next Year (2025)

  1. Potential for Cooling Material Prices: While materials are generally expected to rise, there is a possibility that some materials may stabilize or decrease slightly if supply chain issues ease, though this is uncertain.

  2. More Advanced Construction Technologies: Waiting may give you access to newer building technologies or materials that become available in 2025, potentially offering more cost-effective or energy-efficient solutions.

  3. Government Incentives or Programs: There may be new government housing incentives, tax rebates, or green building subsidies introduced in 2025, which could help offset the rising costs.

Competitive Landscape

  • Domestic vs. Imported Materials: As imported materials may become more expensive due to the weaker peso and global market volatility, there could be a shift toward more locally sourced materials. Companies offering local alternatives for steel, cement, and wood may see an uptick in demand.

  • Green Building Trends: Sustainable materials and eco-friendly construction methods are becoming more popular. Green building certifications (LEED, BERDE) may increase, and these trends could slightly impact construction costs as more builders move toward energy-efficient designs.

  • Regional Differences: Construction costs in Metro Manila are higher than in provincial areas. However, as development continues to spread to Cebu, Davao, and other growth centers, prices in those regions are also expected to increase, though at a slower rate compared to Metro Manila.

Build Now or Wait?

Building Now (2024) – Recommended if:

  1. You want to avoid the risk of rising material and labor costs, which could increase by 5%–10% next year.

  2. You have access to current interest rates, which may rise in 2025 as central banks continue adjusting monetary policies to combat inflation.

  3. You’re looking to secure existing government incentives for construction or energy-efficient homes.

Waiting Until 2025 – Recommended if:

  1. You expect to benefit from potential new technologies or government housing programs that could reduce construction costs in the long run.

  2. You’re flexible with timing and can wait for potential price stabilization in the market, although this remains uncertain.

  3. You want to monitor the market for possible developments in green building incentives, which may lower long-term operational costs.


  • Cost-conscious builders would likely benefit from starting construction now to lock in lower material and labor costs and secure favorable interest rates.

  • Strategic investors might opt to wait, hoping for favorable new policies or technological advances, but the risk of rising costs outweighs the potential savings from waiting.


Building Now (2024)
Building Now (2024)

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