Property prices slow down in Q2
Growth in property prices has been sustained for four straight quarters, albeit at a slower pace in the second quarter, according to the Bangko Sentral ng Pilipinas (BSP).
Based on the Residential Real Estate Price Index (RREPI) of the BSP, the property price index recorded an increase of 2.6 percent to 142.1 in the second quarter from 138.5 in the same period last year. The latest growth rate was slower than the 5.7 percent expansion recorded in the first quarter.
“The residential real estate prices of various types of new housing units in the Philippines continued to rise in the second quarter, albeit slower than the previous quarter’s year-on-year growth,” the BSP said.
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.
Quarter-on-quarter, the BSP reported a 1.6 percent increase in residential real estate prices in the second quarter from the RREPI of 139.8 in the first quarter.
ING Bank senior economist Nicholas Mapa said the aggressive rate hikes delivered by the BSP in the past few months may slow price pressures in the sector. “Rapid fire rate increases of late to slow price pressures on real estate market in coming months,” he said.
The BSP has raised interest rates by 225 basis points so far this year, bringing the overnight reverse repurchase rate to 4.25 percent from an all-time low of two percent.
The country sustained a strong economic rebound with a gross domestic product (GDP) growth of 7.8 percent in the first half despite a slower growth of 7.4 percent in the second quarter from 8.2 percent in the first quarter.
This was stronger than the 6.5 to 7.5 percent growth set by the Cabinet-level Development Budget Coordination Committee (DBCC) for this year.
“Outsized concerns about a housing bubble remain allayed for now,” Mapa said.
According to the BSP, the increase in the nationwide RREPI in the second quarter was mainly driven by the rise in the prices of townhouses, duplex housing units and condominium units.
The index showed the prices of duplex units went up by 11.3 percent to 161; followed by condominium units, up by 8.6 percent to 187; townhouses, up by 4.1 percent to 181.8 and single-detached units, up by 0.8 percent to 119.1.
The BSP attributed the year-onyear pickup in nationwide housing prices to the 6.3 percent rise in residential property prices in the National Capital Region (NCR) to 156.9 in the second quarter from 147.6 a year ago.
Likewise, the residential real estate prices in areas outside the NCR inched up by 2.2 percent to 136.9 from 133.9.
Meanwhile, the BSP also reported a 6.5 percent increase in the number of real estate loans granted for all types of new housing units in the country from April to June.
This was fueled by the 17 percent growth in residential real estate loans in areas outside NCR that erased the 7.7 percent drop in NCR.
According to the BSP, the average appraised value of new housing units in the country stood at P73,751 per square meter in the second quarter. The average appraised value per sqm was higher in the NCR at P119,841 than both the national and AONCR average at P47,094.