Residential real estate prices soften in Q2

The cost of acquiring homes softened by 2.1 percent quarteron-quarter after rising for two straight quarters, according to the Bangko Sentral ng Pilipinas.

The BSP said the residential real estate price index (RREPI) stood at 117.5 in the second quarter from 120 in the first quarter, but was marginally higher than the 117 recorded in the second quarter of last year.

The RREPI measures the average change in prices of various types of housing units based on data from housing loans granted by universal, commercial, and thrift banks.

Except for condominium units, data showed prices of single detached or attached houses, duplex, and townhouse softened in the second quarter of the year from the first quarter.

The acquisition price for duplex units fell by 7.9 percent to 111.4 in the second quarter from 121 in the first quarter, followed by single detached or attached units that decreased by 4.7 percent to 100.7 from 105.7 and townhouse that slipped 0.4 percent to 133.9 from 134.4.

On the other hand, the purchase price of condominium units increased by 4.5 percent to 151.8 from 145.2. Demand for condominium units has been on the rise due to strong demand from workers of Philippine offshore gaming operators (POGOs).

Year-on-year, price increases were noted in duplex units at 12.5 percent, condominium at 9.6 percent, and townhouse at 4.3 percent. The price of single detached or attached unit, on the other hand, declined by 4.2 percent.

The BSP said residential property prices were lower in both the National Capital Region (NCR) and areas outside NCR for the second quarter compared to the first quarter figures.

The average residential property prices in both the NCR and areas outside NCR went up by 0.2 percent and two percent, respecprices tively, compared to quarterago prices.

Year-on-year, the average residential property prices in NCR went up by 5.2 percent, while those areas outside NCR declined by 1.1 percent.

“In NCR, the higher growth in prices of duplexes and condominium units offset the decline in prices of single detached houses and townhouses. In areas outside NCR, the drop in of single detached houses outweighed the increase in prices of other types of housing units,” the BSP said.

For the second quarter, seven in 10 or 73.4 percent of residential real estate loans (RRELs) were for the acquisition of new housing units.

By type of housing unit, 45.8 percent of residential property

loans were for the purchase of condominium units followed by single detached units with 43 percent, and townhouses with 10.5 percent.

By area, majority of the loans granted in the NCR were for the purchase of condominium units, while loans granted in areas outside NCR were for single detached houses.

The BSP placed the real estate and project finance exposures of Philippine banks under tight watch after debt watchers and multilateral lending agencies have raised the red flag over the possible overheating in the economy.

The BSP has approved enhancements to the prudential reporting requirements in order to strengthen oversight of banks’ real estate and project finance exposures.