New RREPI shows no housing bubble in Philippines–BSP
THE Bangko Sentral ng Pilipinas (BSP) rolled out the maiden results of the much-awaited Residential Real Estate Price Index (RREPI)—showing a high singledigit growth of residential real- estate prices in the first quarter of the year, compared to year-ago levels.
Results showed the RREPI increased 9.2 percent in the first quarter of the year—with condominium unit prices driving the growth during the period.
“We believe there’s no real- estate bubble right now, but we want to continue to monitor the property sector,” central bank Governor Amando M. Tetangco Jr. said.
“The 9.2-percent growth represents a vibrant housing industry in the Philippines, and the robustness of this conclusion is confirmed by the trends in consumer prices, as well as the recent result of the consumer expectation survey,” said Diwa C. Guinigundo, central bank deputy governor for the monetary stability sector.
The BSP said condominium units posted the highest year- on-year growth in prices at 12.9 percent, followed by townhouses at 8.5 percent.
Asked if the central bank is alarmed by the relatively elevated growth rate of condominium prices, Tetangco said: “Not at all. They’ve somewhat slowed down in building. We want to look at the total picture. At this point in time, condominiums, if you look at other indicators, like building permits, there’s no bubble.”
Geographically, areas within and areas outside the National Capital Region (AONCR) relatively follow the same level of growth.
Real-property prices in the NCR increased 9.7 percent, while prices in AONCR increased by 9.4 percent.
Quarter-on-quarter, meanwhile, RREPI grew by 1.9 percent—with prices of real estate being driven by growth in AONCR at 4.2 percent. Prices in the NCR, meanwhile, posted a quarter- on- quarter decline of 0.2 percent.
The RREPI measures the average changes in prices of different types of housing units over a period of time, where the growth rate of the index measures house inflation.
The construction of the RREPI is based on banks’ approved housing-loan applications.
Out of the 109 banks covered, 93 banks, or 85.3 percent, submitted their reports for the first quarter of the year.