Residential Real Estate Prices Grew YOY in Q3 2021
Property prices finally rebounded in the third quarter after slumping for two straight quarters, buoyed by the sharp increase in the prices of condominium units and townhouses as demand heightened amid the continued reopening of the economy.
The Bangko Sentral ng Pilipinas (BSP) said the Residential Real Estate Price Index (RREPI) increased by 6.3 percent to 139.5 in the third quarter from 131.2 in the same quarter last year.
This reversed 0.4 percent and 9.4 percent declines in the first and second quarters, respectively. The RREPI, launched in the first quarter of 2016, is used as an indicator for assessing the real estate and credit market conditions in the country.
“The nationwide house prices increased by 6.3 percent year-on-year partly due to the stronger consumer demand for residential property, particularly townhouses and condominium units,” the central bank said.
The increase, according to the BSP, is consistent with the outcome of the third quarter 2021 Consumer Expectations Survey (CES) that showed a higher percentage of consumers preferring to buy real estate in the reference quarter amid signs of economic recovery.
The central bank attributed the pickup in nationwide housing prices to the 11.4 percent rise in the index of residential property prices in the National Capital Region (NCR) to 153 in the third quarter from 137.3 in the same quarter last year.
“The considerable uptick in the NCR residential property prices was brought about by the rise in the prices of townhouse and condominium units, which outweighed the decline in the prices of single detached/attached houses in the NCR,” the BSP said.
Housing prices in the NCR slumped for four straight quarters year-on-year since the fourth quarter of 2020 due to lower demand as families migrated to the provinces and areas outside the capital to escape the strict lockdown and quarantine measures amid rising COVID-19 infections.
With the accelerated vaccine rollout as well as declining COVID-19 cases, families are slowly returning to the capital as some of them are now reporting for work in their offices while some students also resumed face-to-face classes.
On the other hand, residential real estate prices in areas outside NCR have been rising since the third quarter of 2019 before contracting slightly by 0.6 percent in the second quarter of this year.
In the third quarter, the BSP said property prices in areas outside NCR also increased by 4.9 percent to 133.3 from 127.1.
The BSP said the number of real estate loans granted for all types of new housing units in the country jumped by 51.1 percent in the third quarter of the year. The purchase of new housing units accounted for 84.7 percent of the real estate loans.
Most of the loans granted in NCR were used to purchase condo units while loans granted in the provinces involved the acquisition of single-detached or attached houses last year.
More than a third of the real estate loans were disbursed in NCR followed by Calabarzon with 28.5 percent, Central Luzon with 13 percent, Central Visayas with five percent and Western Visayas with 4.7 percent.