Nationwide residential property prices grew by 27.1 percent year-on-year in Q2 2020 – Banko Sentral ng Pilipinas

Residential real estate prices of various types of new housing units in the Philippines rose by 27.1 percent in April – June of 2020 compared last year.

This is based on the Residential Real Estate Price Index (RREPI) as reported by BSP last Sept 2020.

This is the highest year on year growth rate recorded since the start of the series in 2016.

Banks cited the following reasons for the uptick in real estate prices in including:

a) higher demand for high-end projects, which drove the average price per square meter (sqm) upwards; and

b) rising prices of construction materials, labor costs and other indirect costs, e.g., higher marketing costs of appraised premium properties. The RREPI registered 149.4 index points in Q2 2020 (from an index of 134.9 in Q1 2020 and 117.5 in Q2 2019). The increase in the index may be attributed to the higher percentage of loans granted for houses with prices above Php100,000 per square meter, which comprised almost half of total loans (at 49.5 percent in Q2 2020 from 24.5 percent in Q2 2019). Consequently, the average, median and minimum price per square meter grew y-o-y by 66 percent, 122.9 percent and 317.5 percent, respectively, in Q2 2020.

Further, in terms of area and type of housing unit, the highest contributors to the increase in housing prices were loans for the purchase of condominium units (particularly those in NCR) and single attached/detached houses. Low base effects also contributed to the price growth.

Residential property prices in NCR grew by 34.9 percent relative to a year ago, which is higher than the 18.1 percent growth in AONCR . In NCR, all types of housing units registered an increase in prices, except for duplexes as no loans for the purchase of duplexes in the said area were granted and reported in Q2 2020.

Prices of condominium units rose the fastest at 30.1 percent

The average appraised value per sqm of new housing units grew by 66 percent year on year and 24.2 percent compared to last quarter. All types of new housing units recorded a growth in their average appraised values from a year ago.

Tables and Figures in this BSP Report