The residential real estate prices of various types of new housing units declined for two consecutive quarters due mainly to the effects of the global health crisis, according to the latest Residential Real Estate Price Index released by the Bangko Sentral ng Pilipinas over the weekend.
The nationwide house prices in the second quarter this year contracted 9.4 percent year on year, deeper than the 4.2-percent decline a quarter ago.
“High base effects may also have contributed to the drop in prices given the registered peak of the index in Q2 2020. In contrast, property prices increased by 4.8 percent quarter-on-quarter,” the BSP said.
“The contraction in the nationwide residential property prices was driven mainly by the downtrend of property prices in the National Capital Region, which fell by 18.3 percent relative to Q2 2020, marking four consecutive quarters of decline since Q3 2020,” it said.
The decline stemmed from the negative price changes of single detached, condominium and townhouse units in the NCR. In the case of duplex housing, no bank loans were granted and reported to the BSP in the second quarter.
Property prices in areas outside NCR also decreased marginally by 0.6 percent as the drop in single detached/attached houses more than offset the growth in townhouses, duplexes and condominium units. On a quarter-on-quarter basis, house prices grew in NCR by 3.4 percent and AONCR by 5.1 percent following the national trend.
The 9.4-percent year-on-year drop in the nationwide RREPI was primarily driven by the fall in prices of condominium units and single detached/attached houses at 14.3 percent and 7.4 percent, respectively, in Q2 2021. This is the fourth consecutive quarter that prices of condominium units declined, owing mainly to the lackluster demand in the NCR.
In contrast, prices of duplexes and townhouses increased 28.9 percent and 15.1 percent, respectively.
The number of residential real estate loans (RRELs) granted for all types of new housing units in the Philippines rose by 82.3 percent in the second quarter 2021, but fell 3.6 percent quarter on quarter. A similar trend was observed in NCR, while the number of RRELs granted in AONCR expanded year on year and quarter on quarter.
The average appraised value per square meter of new housing units in the country contracted 29.1 percent year on year, but rose 1.8 percent quarter on quarter. This trend was similarly observed in NCR, while in AONCR, the average appraised value per sqm of new properties rose year on year and quarter on quarter.
By type of new dwellings, condominium units and single detached/attached houses registered lower average appraised value per sqm, while higher average appraised value per sqm was observed for townhouses and duplexes. The average appraised value per sqm across all types of housing units increased on a quarter-on-quarter basis.
The weight of each type of housing unit in the RREPI is determined by dividing the total floor area (in sqm) of a specific type of housing unit over the total floor area of all housing types.
Thus, single detached/attached houses in the RREPI in the second quarter 2021 continued to constitute the largest weight at 54.2 percent. Meanwhile, condominium units, townhouses, and duplexes accounted for 30.8 percent, 13.8 percent and 1.3 percent, respectively.
In Q2 2021, the purchase of new housing units accounted for 79.1 percent of residential real estate loans. Meanwhile, by type of housing unit, most of the residential property loans were used for the acquisition of condominium units (49.5 percent), followed by single detached/attached houses (39.2 percent) and townhouses (10.3 percent).
Most of the residential real estate loans granted in NCR were for the purchase of condominium units, while loans granted in AONCR were for the purchase of single detached/attached houses.