Property prices rise in Q2 — BSP

MANILA, Philippines — Property prices picked up in the second quarter of the year due to strong demand for townhouses and condominium units, the Bangko Sentral ng Pilipinas (BSP) reported over the weekend.

The central bank’s residential real estate price index (RREPI) rose by 4.8 percent to 117.2 in the second quarter from 111.8 in the same quarter last year.

The RREPI measures the average change in prices of various types of housing units comprising of single-detached/attached house, duplex, townhouse and condominium unit based on data from housing loans granted by universal, commercial and thrift banks.

The BSP said the average price of townhouses booked a double-digit increase of 13.3 percent, followed by condominium units with 9.1 percent and single-detached housing units with 0.6 percent.

Costs to acquire homes grew faster at 5.1 percent in the National Capital Region (NCR) as higher growth in prices of condominium units and townhouses offset the decline in prices of single-detached houses and duplexes.

On the other hand, the average residential property prices in areas outside NCR climbed 4.1 percent compared to year-ago prices due to higher prices of townhouses, duplexes, single detached houses and condominium units.

In the second quarter, the BSP said about seven in 10 or 77.1 percent residential real estate loans were intended for the purchase of new housing units.

By type of housing unit, 46.1 percent of residential property loans were for the acquisition of condominium units, followed by single-detached units with 45.6 percent and townhouses with 7.8 percent.

By area, condominium units were the most common house purchases in NCR, while single-detached houses were prevalent in areas outside the region.

NCR accounted for 45.2 percent of the total number of residential real estate loans granted during the quarter, followed by CALABARZON with 27.9 percent, Central Luzon with 6.9 percent, Central Visayas with 5.9 percent, Western Visayas with five percent, Davao Region with 3.5 percent and Northern Mindanao with 1.7 percent.

The BSP placed the real estate and project finance exposures of Philippine banks under tight watch after debt watchers and multilateral lending agencies raised the red flag over the possible overheating of the economy,

The BSP’s Monetary Board has approved enhancements to the prudential reporting requirements in order to strengthen oversight of banks’ real estate and project finance exposures.

Latest data from the BSP showed loans extended by big banks for real estate activities grew 15.6 percent to P1.32 trillion in end-August from P1.14 trillion in end August last year. The sector accounted for 16.8 percent of the total loans disbursed by universal and commercial banks.