MANILA, Philippines — Home prices nationwide posted a slower annual growth in the second quarter, and an analyst expects the recent rate hikes by the Bangko Sentral ng Pilipinas to temper demand for shelters in the coming months.
Data released by the Bangko Sentral ng Pilipinas on Friday revealed the Residential Real Estate Price Index, a measure of the average change in the prices of various types of housing units, grew 2.6% year-on-year in the second quarter, slower compared to 5.6% annual expansion recorded in the preceding three months.
On a quarterly basis, however, property prices inched up 1.6%, a reversal from 0.9% quarter-on-quarter contraction reported in January-March period.
Introduced in the first quarter of 2016, the RREPI is based on banks’ data on actual mortgage loans granted to acquire new housing units only.
BSP data showed bank loans taken out to buy new houses rose 6.5% year-on-year in the second quarter. Much of the increase came on the back of a 17% growth of bank loans from areas outside Metro Manila in the same period.
Data broken down showed prices of shelter in Metro Manila grew 6.3% year-on-year in the second quarter, slower compared to the 9.5% recorded in the preceding quarter. Pricier townhouses and condominium units drove the uptrend, tempering the declines observed in prices of single-detached/attached houses.
Quarter-on-quarter, home prices in the National Capital Region inched up a measly 0.2%.
Outside Metro Manila, home prices rose 2.2% year-on-year in the second quarter.
For Nicholas Antonio Mapa, senior economist at ING Bank in Manila, said the BSP’s recent rate hikes meant to control stubbornly high inflation could temper demand for homes. Banks typically use the BSP’s key rate as basis when determining the interest rates that a borrower must pay, including those for home loans.
“Outsized concerns about a housing bubble remain allayed for now,” Mapa said in a Viber message.
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The article was originally published in PhilStar Global and written by Ramon Royandoyan.
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