Residential Property Grows the Highest in Five Years
According to the Central Bank of the Philippines, residential real estate prices rose to its highest since the start of the series last 2016. It grew to 27.1 percent year-on-year (y-o-y) in Q2 2020. This data is based on the latest quarterly Residential Real Estate Price Index (RREPI) report released by the commercial and thrift banks in the Philippines. The various types of housing included are condominium, single-detached, single- attached, townhouses, and duplexes.
The banks cited a few factors contributing to the said growth. One of which is the higher demand for high-end projects. This influences the average price per square meter of the property to go up which results to higher property value thus, affecting the price to go up as well.
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Another contributing factor is the Increase in costs such as materials, labor, and other indirect costs. One predominant example to have contributed to the increase in cost is the higher marketing cost of appraised premium properties.
In terms of the area and type of housing unit, the loan to purchase condominiums (particularly in the National Capital Region), and single attached homes in both NCR and Areas Outside the National Capital Region (AONCR) are reported to have the highest attribute to the housing price growth this Q2 2020. Low base effects also contributed to it, the central bank added.
The residential property prices for both NCR and AONCR registered growth in Q2 of 2020. Relative to its rate from a year ago, areas in NCR are recorded to have a price growth of 34.9 percent which is higher than that of AONCR at 18.1 percent. The growth in residential property prices is reflected in all housing types in NCR except in duplexes. This is after no grant for loans to purchase duplexes were recorded in the area. Likewise, prices in AONCR went up across all housing types.
In totality, the residential real estate price grew y-o-y for all housing types. Relative to Q2 of 2019, all prices went up in Q2 of 2020. Condominium units registered the fastest at 30.1 percent y-o-y. Single-detached/attached houses, townhouses, and duplexes grew by 24.1 percent, 10.8 percent, and 0.8 percent, respectively.
This quarter’s residential real estate loans (RRELs) on the other hand showed a decline for all of the housing types in both NCR and AONCR. For all types of new housing units, there was a decline of 55.2 percent y-o-y and 54.9 percent q-o-q.
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Moreover, included in the report is the registered growth of average appraised value per sqm. of new housing units. It grew by 66 percent y-o-y and 24.2 percent q-o-q, recording a growth in the average appraised values from a year ago for all types of new housing units.
On the profiles of the Resident real estate loans, 84.8 percent is accounted for purchasing of new house units. For house type-specific, more than half of the total percentage was for the purchase of condominium units at 62.7 percent, followed by single-detached/attached houses at 32.1 percent, and townhouses at 4.8 percent. Most of the RRELs recorded in Q2 2020 are from NCR, majority for condo purchases, followed by AONCR areas, which are mostly for the purchase of single detached/attached houses.