Home prices rise further in Q3

MANILA, Philippines — Home prices rose further, although at a slower pace, in the third quarter last year as high interest rates continued to increase monthly housing costs, according to the Bangko Sentral ng Pilipinas (BSP).

The central bank’s Residential Real Estate Price Index (RREPI) rose by 12.9 percent to 167.7 in the third quarter of 2023 from 148.6 in the same quarter in 2022.

This was slower than the 14.1 percent increase recorded in the second quarter of last year.

Housing prices also increased by 3.4 percent from 162.2 in the second quarter of 2023.

Nationwide property prices last contracted in the second quarter of 2021 when it shrank by 9.4 percent. The RREPI, launched in the first quarter of 2016, is used as an indicator for assessing the real estate and credit market conditions in the country.

“Residential real estate prices of various types of new housing units in the Philippines continued to increase in the third quarter of 2023, rising by 12.9 percent year-on-year and 3.4 percent quarter-on-quarter, albeit lower than the 14.1-percent and 5.3-percent growth rates registered in the second quarter of 2023, respectively,” the BSP said in a statement.

The rising cost of living and the full reopening of the economy after the COVID pandemic further pushed real estate prices.

Residential property prices in the National Capital Region (NCR) rose by 12.3 percent to 201.9 in the third quarter of 2023 from 179.8 in the third quarter of 2022 as prices of single-detached/attached houses, condominium units and townhouses increased.

Likewise, residential property prices in areas outside the NCR (AONCR) grew by 14.3 percent to 155.9 from 136.4, driven by more positive annual increases in the prices of all types of housing units.

The BSP reported that the prices of duplex housing units booked the highest growth of 57.7 percent to 262.4, followed by single-detached/attached houses at 16.8 percent to 142.9, townhouses at 9.3 percent to 194.6 and condominium units at 8.3 percent to 226.9.

Due to higher interest rates, the BSP reported a 1.8-percent decline in the number of residential real estate loans granted for all types of new housing units for the third quarter of 2023.

According to the BSP, residential real estate loans contracted by 11.9 percent in NCR and erased the 5.1 percent increase in loans granted in AONCR.

Year-on-year, residential real estate loans nationwide grew by six percent as the 15 percent growth in AONCR wiped out the 9.3 percent contraction in NCR.

The bulk or 76.2 percent of residential real estate loan transactions in the third quarter of last year were used to purchase new housing units.

Almost half or 48.2 percent went to the acquisition of single-detached/attached houses, followed by condominium units with 36.3 percent and townhouses with 15 percent.

Of the total number of transactions, 32.2 percent was granted in Calabarzon, 31.8 percent in NCR, 12.3 percent in Central Luzon and 6.1 percent in Western Visayas.

From July to September last year, the appraised value of new housing units in the country averaged P92,168 per square meter, with a nine percent and 17.5 percent growth over comparable year- and quarter-ago levels, respectively.