AFTER a steep decline in the previous quarter, residential real estate prices of various types of new housing units in the Philippines have recovered in the fourth quarter of 2020 based on the Residential Real Estate Price Index (RREPI).
House price growth reverted to the positive territory as the index rose by 0.8 percent year-on-year, and by 2.4 percent quarter-on-quarter (q-o-q), the Bangko Sentral ng Pilipinas revealed Friday, March 26, 2021.
The positive y-o-y growth in the overall residential property prices was driven mainly by those in the areas outside the National Capital Region (AONCR), which grew by 5.9 percent relative to the fourth quarter of 2019. Prices across all types of housing units in AONCR, except for the prices of condominium units, rose in the last quarter in 2020.
Meanwhile, property prices in the NCR contracted. The slump in property prices continued for the second consecutive quarter, contracting by 4.8 percent in the fourth quarter of 2020. The decrease in the prices of condominium units in the NCR outweighed the increase in the prices of duplexes, townhouses and single detached/attached houses. By contrast, house prices rose by 4.8 percent q-o-q in the NCR, tracking the national trend. By category of housing units, residential property prices climbed y-o-y across all types of dwelling, except for condominium units.
Prices of duplexes, townhouses and single detached/attached houses rose in the fourth quarter by 20 percent, 16.1 percent, and 4.7 percent, respectively, while prices of condominium units contracted by 8.4 percent in the same period.
This is the second consecutive quarter that condominium prices declined. The decrease in the prices of condominium units in both NCR and AONCR may be attributed to the postponement of new launches by developers and lackluster demand for transient dwelling amid the pandemic.
Meanwhile, the q-o-q growth of 2.4 percent in the RREPI was accounted for by higher prices of duplexes, townhouses and condominium units, which more than offset the marginally lower prices of single detached/attached houses.
Residential real estate loans
As for residential real estate loans, the BSP report revealed that loans for new housing units declined by 3.6 percent y-o-y, but rose by 74.1 percent q-o-q. A similar trend was observed in NCR. In AONCR, the increase in the number of RRELs granted was registered for both y-o-y and q-o-q.
The average appraised value per square meter of new housing units in the country contracted by 16.8 percent y-o-y and four percent q-o-q. In both NCR and AONCR, the average appraised value per square meter of new properties was lower y-o-y, but nonetheless higher q-o-q. By type of new dwellings, lower average appraised value per square meter was registered in condominium units y-o-y and single detached/attached houses q-o-q.
Moreover, in the last quarter of 2020, the purchase of new housing units accounted for 83.4 percent of residential real estate loans (RRELs). By type of housing unit, most of the residential property loans were used for the acquisition of condominium units (42.2 percent), followed by single detached/attached houses (30.5 percent) and townhouses (26.9 percent). The number of loans granted for the purchase of townhouses registered the largest y-o-y expansion on account of the 253.3 percent increase in AONCR.
Most of the RRELs granted in the NCR were for the purchase of condominium units, while RRELs granted in AONCR were for the purchase of single detached/attached houses.
By region, 40.1 percent of the total number of RRELs granted were from the NCR, while the rest were distributed in AONCR—Calabarzon (24.4 percent), Central Luzon (12.8 percent), Central Visayas (4.8 percent), Davao Region (4.2 percent), Western Visayas (3.7 percent) and Caraga (3.1 percent).
The NCR and the said six regions combined accounted for 93.1 percent of total housing loans granted by banks, the BSP said. (KOC)