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Residential Real Estate Prices Accelerate In Q2 2016


Residential real estate price index (RREPI) accelerates by 11.3 percent year-on-year

Residential real estate prices grew faster at 11.3 percent in Q2 2016 as the RREPI rose to 122.8  from 110.3 for the same quarter a year ago. The annual growth in residential real estate prices was higher than the 9.4 percent increase posted a quarter ago. Single detached housing units registered the highest growth in prices (18.6 percent) followed by townhouses (14.7 percent). Meanwhile, the prices of condominium units decreased marginally (-0.1 percent).

Growth in real property prices in Areas Outside the National Capital Region (AONCR) outpaces NCR in Q2 2016

Growth in residential real property prices accelerated in AONCR by 18.4 percent but moderated in NCR to 2.7 percent in Q2 2016. This is due largely to the higher rates of increase in prices of single detached housing units and townhouses in AONCR compared to those of NCR. Moreover, the prices of condominium units edged lower in NCR but increased slightly in AONCR.

Profile of residential real estate loans for Q2 2016

For Q2 2016, about seven in ten real estate loans were for the purchase of new housing units (71.7 percent). By type of housing unit, about half of residential property loans were for single detached (50.1 percent), followed by condominium units (41.2 percent) and townhouses (8.4 percent). Condominium units were the most common house purchases in the NCR while single detached houses were mostly acquired in AONCR. By region, NCR accounted for 42.1 percent of the total number of residential real estate loans granted during the quarter, followed by Calabarzon (31.5 percent), Central Luzon (6.7 percent), Central Visayas (5.2 percent), Western Visayas (4.9 percent), Northern Mindanao (3.4 percent) and Davao Region (2 percent). Together, these seven regions accounted for 95.8 percent of total housing loans granted by banks.

About the report

Under BSP Circular No. 892 dated 16 November 2015, the BSP requires all universal/commercial banks (UBs/KBs) and thrift banks (TBs) in the Philippines to submit a quarterly report on all Residential Real Estate Loans (RRELs) granted for the generation of RREPI. Out of the 106 banks covered, 96 banks or 90.6 percent (consisting of 40 U/KBs and 56 TBs) submitted their reports to the BSP during the second quarter of 2016. The residential real estate price index (RREPI) which is estimated every quarter based on housing loans granted by banks is a first in the Philippines and is expected to provide a valuable tool in assessing the real estate and credit market conditions in the country.  The RREPI measures the average changes in prices of different types of housing units (single detached, condominium, and townhouse) over a period of time across geographical areas (NCR and AONCR) where the growth rate of the index measures house price inflation.  The RREPI is computed as weighted chain-linked index based on the average appraised value per square meter weighted by the share of floor area of housing units.

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