Residential real estate prices of various types of new housing units in the Philippines continued to increase in Q3 2023, rising by 12.9 percent year-on-year (YoY) and 3.4 percent quarter-on-quarter (QoQ), albeit lower than the 14.1 percent and 5.3 percent growth rates registered in Q2 2023, respectively (Figure 1).
By area, residential property prices increase YoY in both the NCR and AONCR
On a YoY basis, residential property prices in the National Capital Region (NCR) rose by 12.3 percent in Q3 2023 as prices of single-detached/attached houses, condominium units, and townhouses increased for the same period. Similarly, residential property prices in Areas Outside the NCR (AONCR) grew by 14.3 percent, driven by more positive annual increases in the prices of all types of housing units.
On a QoQ basis, residential property prices rose by 11.5 percent and 0.1 percent in the NCR and AONCR, respectively (Figure 1).
Prices of all housing types increase
By housing type, prices of duplex housing units registered the highest YoY growth rate in Q3 2023 (at 57.7 percent), followed by single-detached/attached houses (at 16.8 percent), townhouses (at 9.3 percent), and condominium units (at 8.3 percent) (Figure 2).
A look at the QoQ changes revealed that the prices of duplex housing units, likewise, grew the fastest (by 30.8 percent), followed by condominium units (by 15.6 percent), and single-detached/attached houses (by 1.4 percent). Meanwhile, prices of townhouse units declined from the previous quarter (Figure 2).
Nationwide loan availments for new housing units fall YoY but grow at a double-digit rate QoQ
In Q3 2023, the number of residential real estate loans (RRELs) granted for all types of new housing units in the Philippines declined by 1.8 percent YoY as those from the NCR contracted by 11.9 percent, outweighing the 5.1 percent growth in AONCR. By contrast, nationwide housing loan availments grew by 18 percent QoQ, following the 31.9 percent and 11.3 percent increase in the number of RRELs in the NCR and AONCR, respectively (Figure 3a).
The total number of RRELs granted in the Philippines rose by 6 percent YoY driven by the double-digit growth in AONCR (15 percent), which outweighed the 9.3 percent contraction in the NCR. Likewise, the total number of transactions grew by 22.3 percent QoQ, brought about by the 34 percent and 17.5 percent increase in the number of RRELs in the NCR and AONCR, respectively (Figure 3b).
In Q3 2023, the appraised value of new housing units in the country averaged to Php92,168 per square meter (sqm), with a 9 percent and 17.5 percent growth over comparable year- and quarter-ago levels, respectively. Meanwhile, the average appraised value per sqm in the NCR increased by 12.4 percent YoY and 22.4 percent QoQ to Php156,530 per sqm. In AONCR, the appraised value per sqm expanded by 17.1 percent YoY and 1.3 percent QoQ, to an average of Php55,202. It may be noted that the average appraised value of properties in the NCR is around 3 times higher than in AONCR. (Figure 4).
The weight of each type of housing unit in the RREPI is determined by dividing the total floor area (in sqm) of a specific type of housing unit over the total floor area of all housing types. In Q3 2023, single-detached/attached houses continued to constitute the largest weight in the RREPI at 52.6 percent. Meanwhile, condominium units, townhouses, and duplex housing units accounted for 25.5 percent, 21.3 percent, and0.6 percent in the calculation of the RREPI, respectively (Figure 5).
In Q3 2023, 76.2 percent of residential real estate loan (RRELs) transactions 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 (48.2 percent), followed by condominium units (36.3 percent) and townhouses (15 percent) as seen in Figure 6.
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, 31.8 percent of the total number of RRELs granted were from the NCR, while the balance was from AONCR as follows: CALABARZON (32.2 percent), Central Luzon (12.3 percent), Western Visayas (6.1 percent), Central Visayas (5.8 percent), Davao Region (3.4 percent), and Cagayan Region (2 percent). The said regions, including the NCR, comprised 93.6 percent of the total housing loans granted by banks (Figure 6).
The RREPI is a measure of the average change in the prices of various types of housing units, i.e., single-detached/attached houses, duplex housing units, townhouses, and condominium units, based on banks’ data on actual mortgage loans granted to acquire new housing units (excluding pre-owned or foreclosed properties). It is a chain-linked index, which is computed using the average appraised value per square meter, weighted by the share of floor area of each type of housing unit to the total floor area of all housing units. The RREPI is used as an indicator for assessing the real estate and credit market conditions in the country. The BSP has been releasing the report since June 2016.
Data for the RREPI are obtained through BSP Circular No. 892 dated 16 November 2015, which requires all universal/commercial banks (UBs/KBs) and thrift banks (TBs) in the Philippines to submit to the BSP a quarterly report on all RRELs granted. This was supplemented by the BSP Circular No. 1154 dated 14 September 2022, which requires all digital banks (DBs) in the country to submit similar reports to the BSP.
Source: BSP