Property prices pick up further in Q3

MANILA, Philippines — Property prices in the Philippines further picked up in the third quarter due to the resumption of on-site work and face-to-face classes following the lifting of strict COVID-19 quarantine and lockdown protocols.

Based on the latest Residential Real Estate Price Index (RREPI) of the Bangko Sentral ng Pilipinas (BSP), property prices recorded an increase of 6.5 percent to 148.6 in the third quarter from 139.5 in the same quarter last year.

The index has been rising steadily from 139.8 in the first quarter to 142.1 in the second quarter and 148.6 in the third quarter as the economy further reopened after the resumption of strict lockdown in January due to the rise in COVID-19 infections due to the highly contagious Omicron variant.

“The residential real estate prices of various types of new housing units in the Philippines rose faster in the third quarter by 6.5 percent year-on-year and 4.6 percent quarter-on-quarter,” the BSP said.

From July to September, the price of duplex housing units jumped by 26.7 percent to 166.4, followed by condominium units that went up by 19.2 percent to 209.5, and single detached or attached houses with a 9.8 percent rise to 122.3.

These were enough to offset the 16.3-percent drop in the index for townhouses to 178 in the third quarter.

The RREPI, launched in the first quarter of 2016, is used as an indicator for assessing the real estate and credit market conditions in the country.

The BSP reported that residential property prices in the National Capital Region (NCR) jumped by 17.5 percent to 179.8 in the third quarter from 153 in the same quarter last year as families started to return to the metropolis from the provinces amid the resumption of on-site work as well as face-to-face classes.

Prices of condominium units in the NCR surged by 24 percent to 219.4, while that of singe detached or attached houses grew by 17.9 percent to 103.5. These increases erased the 7.8 percent contraction in the prices of townhouses.

On the other hand, areas outside the NCR booked a slower 2.3-percent rise in property prices to 136.4 in the third quarter of the year from a year-ago level of 133.3.

The prices of townhouses in areas outside the NCR fell by 20.2 percent to 214.2, while the prices of duplex units jumped by 29.4 percent to 213.1 as well as single detached or attached houses grew by 8.5 percent to 124.5.

Likewise, the prices of condo units in the provinces climbed by 5.6 percent to 179.7 from July to September this year.

Meanwhile, the BSP reported a 4.2-percent decline in the number of residential real estate loans (RRELs) granted for all types of new housing units in the country in the third quarter as the BSP Monetary Board delivered aggressive rate hikes to tame inflation and stabilize the peso.

“In the third quarter, 82.2 percent of RRELs were used to purchase new housing units. Meanwhile, by type of housing unit, most of the residential property loans were used for the acquisition of single-detached/attached houses (47.5 percent), followed by condominium units (39 percent), and townhouses (13 percent),” the BSP said.

The central bank said the number of residential real estate loans in NCR slipped by two percent, while that of areas outside NCR declined by 5.7 percent.

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

To cool inflation and stabilize the peso, the BSP raised key policy rates by 350 basis points, bringing the benchmark rate to a 14-year high of 5.50 percent from an all-time low of two percent.

According to the central bank, the average appraised value of new housing units in the country stood at P84,589 per square meter in the third quarter from P73,751 per square meter in the second quarter.