Residential prices up 14.1 percent in Q2

BSP reported that residential real estate prices of various types of new housing units in the Philippines rose faster in the second quarter of 2023 by 14.1% YoY and 5.3% QoQ.
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CEBU, Philippines — Residential property prices in the Philippines surged in the second quarter of 2023, with increases observed across various housing types, according to a report from the latest Bangko Sentral ng Pilipinas (BSP).

BSP reported that residential real estate prices of various types of new housing units in the Philippines rose faster in the second quarter of 2023 by 14.1 percent year-on-year (YoY) and 5.3 percent quarter-on-quarter (QoQ), from 10.2 percent and 1.4 percent in Q1 2023, respectively.

On a YoY basis, residential property prices in the National Capital Region (NCR) and Areas Outside the NCR (AONCR) increased by 15.4 percent and 13.8 percent, respectively, as prices of single-detached/attached houses, townhouses, and condominium units posted annual positive increases.

Based on the QoQ, residential property prices expanded by 7.7 percent in NCR and 4.4 percent in AONCR.

By housing type, prices of duplex housing units, single-detached/attached houses, townhouses, and condominium units contributed positively to the YoY growth of the nationwide RREPI as the indices increased by 24.6 percent, 18.3 percent, 14.7 percent, and 5 percent, respectively.

Moreover, the 5.3 percent QoQ growth in the RREPI was attributed to the higher prices of all housing units,  i.e., single-detached/attached houses (by 6.7 percent), duplex housing units (by 4.8 percent), condominium units (by 3.8 percent), and townhouses (by 3.7 percent) (Figure 2).

Real Estate Loans

During the second quarter, there was a notable one percent year-on-year decrease in the issuance of residential real estate loans or RRRLs for all categories of new housing units in the Philippines.

This decline was primarily driven by an 11.8 percent contraction in RRELs within the National Capital Region (NCR), which overshadowed the 5.3 percent growth in RRELs observed in the areas outside  of NCR (AONCR).

Similarly, when examined on a quarter-on-quarter basis, there was a 4.2 percent decline in the overall national housing loan availments, a trend that followed the preceding 6.3 percent decrease in RRELs within the areas of AONCR.

The average appraised value of new housing units in the country stood at Php78,444 per square meter (sqm) in Q2 2023. The average appraised value per sqm in the NCR was at Php127,884, higher than both the national average and the average appraised value in the AONCR at Php54,496.

The weight of each type of housing unit in the RREPI is determined by dividing the total floor area (in sqm) of a specific type of housing unit over the total floor area of all housing types.

In the same period, single-detached/attached houses in the RREPI continued to constitute the largest weight at 52.5 percent.

Meanwhile, condominium units, townhouses, and duplex housing units accounted for 23.7 percent, 23.2 percent, and 0.6 percent, respectively.

According to BSP, 78.9 percent of RRELs transactions were used to purchase new housing units.

Meanwhile, by type of housing unit, most of the residential property loans were used for the acquisition of single-detached/attached houses (49.1 percent), followed by condominium units (33.6 percent) and townhouses (16.8 percent).

Most of the RRELs granted in the NCR were for the purchase of condominium units, while RRELs granted in the AONCR were for the purchase of single-detached/attached houses.

By region, 29 percent of the total number of RRELs granted were from the NCR, while the balance was from the AONCR as follows: CALABARZON (34.1 percent), Central Luzon (13.4 percent), Central Visayas (7.1 percent), Western Visayas (5.7 percent), Davao Region (3.4 percent), and Northern Mindanao (1.8 percent). NCR and the said six regions combined accounted for 94.5 percent of total housing loans granted by banks.

Data for the RREPI are obtained through BSP Circular No. 892 dated 16 November 2015, which requires all universal/commercial banks (UBs/KBs) and thrift banks (TBs) in the Philippines to submit to the BSP a quarterly report on all RRELs granted.

This was supplemented by the BSP Circular No. 1154 dated 14 September 2022, which requires all digital banks (DBs) in the country to submit similar reports to the BSP. — (FREEMAN)

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