OFW remittances help drive housing demand

CEBU, Philippines — As long as the OFW remittance continues to flow, demand for residential products would never go out of track despite the growing supply.

Colliers International Philippines foresees much profitable residential projects because OFWs are putting their money on real estate.

Money sent by Filipinos working abroad, which accounts for 10% of the economy, reached US$16.3 billion or P319.6 million in the first quarter of this year, up by 2.9 percent year-on-year.

This encouraging performance enticed more developers both local and multinational to look out for partnerships of real estate projects in the country, especially outside Metro Manila.

Latest record from Bangko Sentral Ng Pilipinas (BSP) revealed that 46% of residential loans availed of from the banking institution for the first quarter of 2019, were for single-detached units.

Forty-four percent of the residential acquisition funded by banks, were on condominium units, followed closely by townhouses with 8.6%.

About 74% of residential real estate loans (RRELs) were for the acquisition of new housing units.

By region, NCR accounted for 42.5% of the total number of RRELs granted during the quarter, followed by AONCR-CALABARZON (28.5%), Central Luzon (9.1%), Central Visayas (6.5%), Western Visayas  (4.4%), Davao Region (2.6%) and Northern Mindanao (2%).

Together, NCR and these six other regions accounted for 95.6% of total housing loans granted by banks for the period.

Meanwhile, BSP report indicated that residential real estate prices were higher by 3.1% year-on-year (y-o-y) in first quarter this year. This is because the Residential Real Estate Price Index (RREPI)–which measures the average change in the prices of various types of housing units comprised of single detached houses, duplexes, townhouses, and condominium units, based on data from housing loans granted by universal, commercial, and thrift banks—increased to 119.9 from 116.3 for the same quarter a year ago.

Year-on-year (y-o-y) prices of condominium units and townhouses, on the other hand, grew by 10.9% and 9.6%, respectively. Correspondingly, quarter-on-quarter (q-o-q), the RREPI rose by 1.6%.

Prices of single detached housing units decreased by 1.7%. Similarly, prices of duplex units (which account for only 0.5 % of total new housing units reported) also declined by 8% year-on-year. (FREEMAN)