By Lee C. Chipongian
The central bank said residential real estate prices went up by 12.4 percent year-on-year in the first quarter this year, the third straight quarter that prices have increased.
Based on the latest Residential Real Estate Price Index (RREPI), the 12.4 percent growth is faster than what was reported same time last year of 10.2 percent. It is also higher than the previous quarter’s (end-December 2019) 3.3 percent.
Using bank lending data on real estate loans, the RREPI tracks the average change in the prices of different housing units such as single detached houses, duplexes, townhouses and condominium units.
“Residential real estate prices of various types of housing units in the Philippines grew at a faster rate (in the first quarter) … this is the third consecutive quarter that the index has registered a double-digit growth (and) also the highest growth rate since the first quarter 2016,” according to the BSP. The RREPI was first reported in 2016 and has since been used for assessing the real estate and credit market conditions here.
On a quarter-on-quarter basis, RREPI rose by 3.6 percent as the price increases in duplexes, condominium units and single detached/attached houses offset the 0.8 percent decline in the prices of townhouses, said the BSP.
Residential real estate prices in the National Capital Region (NCR) rose by 18.3 percent year-on-year from nine percent same time in 2019, and from 15 percent in the fourth quarter last year. In areas outside of NCR, prices increased by 8.5 percent from only 0.5 percent end-March 2019, and 8.2 percent in the previous quarter.
“The brisker growth of property prices in NCR can be attributed to the higher increase in the prices of condominium units, which outweighed the decline in prices of single detached/attached houses, duplexes and townhouses. Meanwhile, growth in prices were recorded in all types of housing units in areas outside NCR albeit at a slower pace in townhouses and condominium units,” according to the BSP.
Prices of condominium units were up 23.6 percent year-on-year in the first quarter. Single detached/attached houses also went up by seven percent while townhouses increased by 5.5 percent. Prices of duplexes, in the meantime, grew by 38.3 percent. Duplexes account for only 0.3 percent of total housing units.
The BSP said in the first quarter, homebuyers accounted for 74.4 percent of residential real estate loans (RRELs). “More than half of residential property loans were used for the acquisition of condominium units (53.8 percent), followed by single detached/attached houses (38.2 percent), and townhouses (7.6 percent),” it said.
In the NCR, banks’ RRELs were mostly to buy condominium units, while in areas outside of the NCR, RRELs were for single detached houses.
By region, the BSP said the NCR accounted for 49.4 percent of the total number of RRELs. “NCR and six other regions combined accounted for 96.3 percent of total housing loans granted by banks.”
These six regions include CALABARZON areas which took 24.7 percent of the RREL share while Central Luzon had 7.7 percent. Central Visayas accounted for 6.1 percent of total number of RRELs, followed by Western Visayas with 3.3 percent, Davao Region with 2.9 percent, and Northern Mindanao with 2.2 percent.