Q2 residential real estate prices up 27.1%

The Bangko Sentral ng Pilipinas (BSP) said  that residential property prices increased by 27.1 percent year-on-year in the second quarter, the highest growth rate recorded by its Residential Real Estate Price Index (RREPI) since it started in 2016.

The RREPI, which measure the average price changes of housing units such as condominium units, single detached/attached houses, duplexes and townhouses, said banks noted the following reasons why residential property prices went up in the second quarter. These are the higher demand for high-end projects that “drove the average price per square meter (sqm) upwards” and also the increasing costs of construction materials and labor.

Banks also cited other indirect costs for the higher property prices such as higher marketing costs of appraised premium properties. This could be due to the higher percentage of loans granted for houses with prices above P100,000 per sqm which accounted for 49.5 percent of total loans, said the BSP.

On a quarter-on-quarter basis, the BSP said RREPI grew by 10.7 percent as “the price increases of single detached/attached houses, condominium units and townhouses outweighed the -32.9 percent decline in the prices of duplexes ,” said the BSP.

By area and type of housing unit, the “highest contributors” to the increase in housing prices were loans to buy condominium units especially in the National Capital Region, as well as single attached/detached houses. “Low base effects also contributed to the price growth,” said the BSP.

In the second quarter, NCR residential property prices went up by 34.9 percent year-on-year, more than the 18.1 percent recorded growth in areas outside of the NCR. “Prices of condominium units rose the fastest at 30.1 percent year-on-year (while) prices of single detached/attached houses, townhouses and duplexes grew by 24.1 percent, 10.8 percent and 0.8 percent, respectively,” said the BSP.

Also in the second quarter, banks’ residential real estate loans (RRELs) granted for all types of new housing units dropped by 55.2 percent year-on-year and by 54.9 percent from end-March versus end-June.

 “The purchase of new housing units accounted for 84.8 percent of RRELs,” said the BSP.

“Meanwhile, by type of housing unit, more than half of residential property loans were used for the acquisition of condominium units (62.7 percent), followed by single detached/attached houses (32.1 percent) and townhouses (4.8 percent).”

The BSP reported that the average appraised value per sqm of new housing units grew by 66 percent year-on-year and by 24.2 percent quarter-on-quarter.

The BSP said the NCR RRELs were used by borrowers to buy condominium units while RRELs in areas outside of the NCR were used to purchase single detached/attached houses.

By region, NCR had a 58.6 percent of the total number of RRELs in the second quarter, followed by CALABARZON with 21 percent, Central Luzon with 5.5 percent, Western Visayas with 3.3 percent, Central Visayas with 3.2 percent, Davao Region with 2.5 percent and Northern Mindanao with 1.9 percent.  “NCR and these six other regions combined accounted for 96 percent of total housing loans granted by banks,” said the BSP.

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Article and Photo originally posted by Manila Bulletin last September 27, 2020 6:00am and written by Lee C. Chipongian.

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