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House prices up 0.8% in 2020 – BSP

Residential real estate prices went up by 0.8 percent year-on-year as of end-fourth quarter 2020, boosted mostly by property price increases in areas outside of the National Capital Region (NCR) as homebuyers are favoring provincial locations over developed cities amid the pandemic.

Based on a report by the Bangko Sentral ng Pilipinas (BSP), on a quarter-on-quarter basis, the BSP’s fourth quarter Residential Real Estate Price Index (RREPI) showed that house prices grew by 2.4 percent.

The RREPI tracks the average change in the prices of various types of housing units such as single detached/attached houses, duplexes, townhouses and condominium units, based on banks’ housing loans data.

Property prices recovered in the fourth quarter from a “steep decline” in the third quarter last year, said the BSP, due to rebounding prices in the provinces.

Areas outside of the NCR drove the price hike and recovery during the quarter. Property prices in the areas outside of the NCR increased by 5.9 percent year-on-year as more homebuyers chose to purchase properties in these locations versus the more developed NCR while on a pandemic lockdown.

The BSP said prices across all types of housing units in these locations, with the exception of prices of condominium units, increased in the last three months of 2020.

Property prices in the NCR, in the meantime, continue to contract to 4.8 percent. The BSP said decrease in the prices of condominium units also outweighed the price increases in duplexes, townhouses, and single detached/attached houses. “By contrast, house prices rose by 4.8 percent quarter-on-quarter in the NCR, tracking the national trend,” it added.

By category of housing units, residential property prices climb y-o-y across all types of dwelling, except for condominium units, added the BSP. In the last quarter of 2020, prices of duplexes went up by 20 percent, townhouses by 16.1 percent, and single detached/attached houses by 4.7 percent.

Prices of condominium units however declined by 8.4 percent, it’s been on the downtrend for the last two quarters of the RREPI report.

The BSP said the decrease in condominium units prices — both in the NCR and in areas outside of the NCR – is due to the COVID-19 lockdown restrictions. During the pandemic, all property developments and the launch of new condomonium buildings and units were postponed. The BSP also noted lackluster demand for transient dwelling because of the quarantines.

The BSP reported that the number of residential real estate loans (RRELs) granted for all types of new housing units fell by 3.6 percent year-on-year in 2020. However it went up by 74.1 percent compared to the third quarter. Housing loans increased both in the NCR and areas outside of the NCR

Borrowers buying new housing units represented about 83.4 percent of total RRELs. By type of housing unit, 42.2 percent are for the acquisition of condominium units, followed by 30.5 percent for single detached/attached houses and 26.9 percent for townhouses.

Loans granted for the purchase of townhouses registered the biggest growth on a year-on-year basis because of the 253.3 percent increase in areas outside of the NCR.

“Most of the RRELs granted in NCR were for the purchase of condominium units, while RRELs granted in areas outside of the NCR were for the purchase of single detached/attached houses,” said the BSP.

The NCR accounted for 40.1 percent of the total number of RRELs while the rest were distributed as: CALABARZON (24.4 percent), Central Luzon (12.8 percent), Central Visayas (4.8 percent), Davao Region (4.2 percent), Western Visayas (3.7 percent), and Caraga (3.1 percent). “NCR and the said six regions combined accounted for 93.1 percent of total housing loans granted by banks,” said the BSP.

Article and Photo originally posted by Manila Bulletin last March 27, 2021 7:00am and written by Lee C. Chipongian.

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