Philippine property prices jump in Q4
Housing prices across the Philippines grew at a faster annual pace in the fourth quarter, driven by strong demand for duplex housing units and condominium units, Bangko Sentral ng Pilipinas (BSP) data showed.
Based on data from the central bank, the Residential Real Estate Price Index (RREPI) rose 7.7% year on year in the fourth quarter, quicker than the 6.5% growth in the previous quarter and the 4.9% in the same period in 2021.
On a quarterly basis, nationwide home prices rose 2.2%.
The growth in property prices in the period was the fastest since the 26.6% print logged in the second quarter in 2020.
The RREPI tracks the average change in prices of residential properties across housing types and locations, which gives the central bank insights into the property market where bank exposure is regulated.
The BSP said the pickup in the fourth quarter was driven by higher prices of duplex housing units, condominium units, and single-detached/attached houses in the fourth quarter.
Nationwide, the prices of duplexes climbed by 42.9% in the fourth quarter. Prices of condominium units and single detached/attached house rose by 12.9% and 10%, respectively.
On the other hand, prices of townhouses contracted by 6.8% during the fourth quarter, marking its second straight quarter of decline.
There is robust demand for horizontal projects such as duplexes and single detached/attached houses as the market continues to recover from the pandemic, said Joey Roi H. Bondoc, associate director for research at Colliers International Philippines.
“The increase was mainly because of strong demand still, outside of Metro Manila. These are horizontal projects outside of the capital region that are doing very well,” Mr. Bondoc said.
The RREPI showed residential property prices in the National Capital Region (NCR) grew by 16.1% year on year in the fourth quarter. Meanwhile, property prices in areas outside NCR (AONCR) inched up by 4.5%.
Data from the central bank also showed residential home loans in the fourth quarter contracted by 10.3% year on year as loans declined in NCR (-22%) and AONCR (-3.4%), reflecting the impact of rising interest rates.
Almost half (57.2%) of these loans were used to purchase new single-detached/attached houses, followed by condominium units (22.5%) and townhouses (19.8%).
According to Mr. Bondoc, consumers are more confident in buying housing units as more people are being employed and families receive more remittances from overseas workers.
“However, we need to watch out for slow launches in the market mainly because of high prices of construction materials as well as interest rates, mortgage rates and surge in land values,” he said.
Inflation is expected to settle within the 7.4-8.2% range in March, the BSP said on Friday. Headline inflation slowed to 8.6% in February from a 14-year high of 8.7% in January.
The BSP earlier this month hiked its key interest rate further by 25 bps to a near 16-year high of 6.25%. It has said its next policy move would depend largely on how consumer prices will behave in the coming months.
The BSP also sees inflation averaging 6%, higher than the 5.8% in 2022, before easing to 2.9% in 2024.