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Housing prices jump in Q3

The sun sets behind towering condominium buildings in Cubao, as seen from Antipolo, Rizal on March 25, 2021. — PHILIPPINE STAR/ MICHAEL VARCAS

By Luisa Maria Jacinta C. Jocson, Reporter

HOUSING PRICES nationwide posted a faster annual growth in the third quarter, driven by sustained demand for condominium units, particularly in the Philippine capital region.

The Bangko Sentral ng Pilipinas (BSP) said the Residential Real Estate Price Index (RREPI) rose 6.5% year on year in the third quarter. This is faster than the 2.6% growth in the second quarter, and the 6.3% expansion in July to September period in 2021.

On a quarterly basis, nationwide home prices rose 4.6%.

BSP data showed the rise in residential property prices was due to higher demand for condominium units, duplex housing units and single-detached/attached houses, which offset the drop in townhouse prices.

In the third quarter, prices of duplex units surged 26.7%, quicker than the 11.3% growth in the previous quarter and a turnaround from the 0.2% decline a year ago.

Condominium unit prices jumped 19.2% in the July to September period, faster than the 8.6% in the previous quarter and 13.6% seen a year ago.

Prices of single-detached/attached houses rose 9.8%, versus the 0.8% growth in the previous quarter and reversing the 4.2% decline a year ago.

Joey Roi Bondoc, associate director and head of research at Colliers Philippines, said that the demand for condominium units is mainly seen in Metro Manila.

“In fact, for the first nine months of 2022, about 15,000 condominium units were already sold in the pre-selling market in Metro Manila, already higher than the 13,000 units sold for the entire 2021,” he said.

Single detached and attached houses will also remain popular, Mr. Bondoc said.

“The overseas Filipino workers (OFW) market as well as local employees will continue to fuel take up for these units over the next 12 months and we expect a continued rise in prices for these developments,” he added.

On the other hand, townhouse prices dropped 16.3% in the July-August period, a reversal of the 4.1% growth in the second quarter and the 37.1% increase a year ago.

The RREPI tracks the average change in prices of residential properties across housing types and locations, which gives the BSP insights into the property market where bank exposure is regulated.

STRONG DEMANDIn the National Capital Region (NCR), home prices posted an annual increase of 17.5% while those outside the NCR inched up 2.3%.

On a quarterly basis, residential property prices went up 14.6% in NCR, but shrank 0.4% in the areas outside NCR.

BSP data also showed the number of housing loans fell by 4.2% year on year. Quarter on quarter, housing loans rose by 19%.

Interest rates have gone up this year, as the BSP has tightened monetary policy to curb inflation. Since May, the Monetary Board has raised rates by a total of 350 basis points, bringing the benchmark interest rate to 5.5%.

Almost half (47.5%) of the granted loans were used to purchase single-detached/attached houses, followed by condominium units (39%) and townhouses (13%).

Most of the loans granted in NCR were for the purchase of condo units.

The average appraised value of new housing units stood at P84,589 per square meter (sq.m.), while the average value in NCR was significantly higher at P139,283 per sq.m.

ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said that residential property prices will see “normal growth” alongside the recovery in the economy.

“The modest growth should dispel outsized concerns about a real estate bubble. Home prices are seen to sustain growth but rising borrowing costs should cap the increase even as the economy improves,” Mr. Mapa said in a Viber message.

Mr. Bondoc said housing demand is expected to continue this year, as the business and consumer outlook improves. He noted horizontal developments will “continue to enjoy brisk take up” that will extend beyond 2023.

However, investors and end-users need to monitor the rise in interest and mortgage rates, Mr. Bondoc said.

BSP Governor Felipe Medalla earlier said there may be rate increases at the Monetary Board’s first two meetings of 2023 in order to bring inflation back to its 2-4% target range.

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