Real estate prices in the second quarter continued to decline, dropping 9.4 percent year-on-year due to subdued housing demand, especially in the National Capital Region (NCR), according to the Bangko Sentral ng Pilipinas (BSP).
The BSP’s Residential Real Estate Price Index (RREPI) has declined in the last two quarters on a year-on-year basis. In the first quarter, housing prices also contracted by 4.2 percent year-on-year.
Housing prices on a quarter-on-quarter basis however, went up by 4.8 percent because of the higher prices of all types of housing units such as single detached/attached houses, duplexes, townhouses, and condominium units.
Besides the effects of the pandemic on the residential property demand, the BSP said the high base effects also drove prices down on a year-on-year basis after peaking in the second quarter in 2020 by 26.6 percent mainly because of a decrease in the proportion or the weight of properties valued at less than P100,000 per square meter.
Based on the latest RREPI, property prices in the NCR contributed to the decline since prices in the area fell by 18.3 percent year-on-year. On a quarterly basis, housing prices in the NCR and areas outside of NCR increased.
“The 9.4 percent year-on-year drop in the nationwide RREPI was primarily driven by the fall in prices of condominium units and single detached/attached houses, at 14.3 percent and 7.4 percent, respectively,” said the BSP.
NCR property prices have declined four quarters in a row due to the negative price changes of single detached, condominium and townhouse units. In the case of duplex housing, the BSP noted that there were no bank loans granted in the second quarter.
Property prices in areas outside NCR dipped by 0.6 percent year-on-year while on a quarter-on-quarter basis, it was up by 3.4 percent in NCR and by 5.1 percent in areas outside of NCR.
By type of housing units, the year-on-year drop is largely driven by the fall in prices of condominium units and single detached houses, said the BSP. This is the fourth consecutive quarter that prices of condominium units declined because of the slow demand in NCR. In the meantime, prices of duplexes rose by 28.9 percent and townhouses increased by 15.1 percent.
The RREPI uses bank data on actual mortgage loans and it measures the average price change of the different types of residential properties.
In the second quarter this year, the BSP said residential real estate loans granted for all types of new housing units increased by 82.3 percent year-on-year. On a quarter-on-quarter basis, property loans dropped by 3.6 percent.
About 79.1 percent of residential real estate loans were used to buy new housing units and 49.5 percent were used for the acquisition of condominium units. Around 39.2 percent of loans were used for single detached/attached houses and 10.3 percent for townhouses.
The BSP said majority of residential real estate loans were granted in the NCR for the purchase of condominium units while loans in areas outside NCR were used to buy single detached/attached houses.
By region, 44.9 percent of loans were released in the NCR and the rest were distributed in CALABARZON (26.4 percent), Central Luzon (10.5 percent), Central Visayas (5.3 percent), Western Visayas (4.4 percent), Davao Region (3.2 percent), and Northern Mindanao (1.2 percent).
Article and Photo originally posted by Manila Bulletin last September 26, 2021 10:00pm and written by Lee C. Chipongian.
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