Philippines property prices hit record high of 27.1%

CEBU, Philippines — The Philippines’ residential real estate segment hits the highest price index since 2016, owing to the pressures brought about by the pandemic.

A report from the Bangko Sentral Ng Pilipinas (BSP) indicated that residential property prices grew a whooping 27.1 percent in the second quarter this year, compared to the same period in 2019.

Based on the Residential Real Estate Price Index (RREPI), this the highest price growth rate recorded since the start of the series in first quarter 2016.

According to the report, banks cited the higher demand for high-end projects, which drove the average price per square meter (sqm) upwards; and b) rising prices of construction materials, labor costs and other indirect costs, e.g., higher marketing costs of appraised premium properties, are some of the reasons of the price uptick in the second quarter 2020.

Further, in terms of area and type of housing unit, the highest contributors to the increase in housing prices were loans for the purchase of condominium units (particularly those in NCR and single attached/detached houses.

By area, residential property prices in both the National Capital Region (NCR) and in Areas Outside NCR (AONCR) register growth year-on-year.

In NCR, all types of housing units registered an increase in prices, except for duplexes as no loans for the purchase of duplexes in the said area were granted and reported during the second quarter 2020.

Likewise, prices in AONCR increased across all types of housing units.

  All types of housing units recorded a growth in prices in second quarter relative to 2019 second quarter levels.

Prices of condominium units rose the fastest at 30.1 percent y-o-y. Similarly, prices of single detached/attached houses, townhouses and duplexes grew by 24.1 percent, 10.8 percent and 0.8 percent.

Quarter-on-quarter (q-o-q), the RREPI for the Philippines rose by 10.7 percent (Figure 1) as the price increases of single detached/attached houses, condominium units and townhouses outweighed the -32.9 percent decline in the prices of duplexes in second quarter of 2020.