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Residential Real Estate Prices Increase at Slower Pace in Q3 2016

12.29.2016

Residential real estate price index (RREPI) increases by 2.2 percent year-on-year

Residential real estate prices grew at a slower pace of 2.2 percent in Q3 2016 as the RREPI rose to 113.4 from 111.0 for the same quarter a year ago. The annual growth in residential real estate prices was lower than the 11.3 percent increase registered a quarter ago. Townhouses posted the highest growth in prices (4.9 percent) followed by condominium units (3.1 percent) and single detached housing units (2.4 percent).

Real property prices rise in Areas Outside the National Capital Region (AONCR) while those of NCR edge lower in Q3 2016

Residential real property prices rose in AONCR by 4.9 percent but declined marginally in NCR by 0.2 percent in Q3 2016. This is due mainly to the faster rate of increase in prices of single detached housing units and townhouses in AONCR compared to those of NCR. Meanwhile, the prices of condominium units increased in both NCR and AONCR.

Profile of residential real estate loans for Q3 2016

For Q3 2016, about seven in ten real estate loans were for the purchase of new housing units                 (69.2 percent). By type of housing unit, about 48 percent of residential property loans were for single detached units, followed by condominium units (44.3 percent) and townhouses (7.6 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 46.3 percent of the total number of residential real estate loans granted during the quarter, followed by  Calabarzon (29.6 percent), Central Luzon (6.1 percent), Central Visayas (4.7 percent), Western Visayas (4.5 percent), Davao Region (3.4 percent) and Northern Mindanao (1.7 percent). Together, these seven regions accounted for 96.3 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 105 banks covered, 102 banks or 97.1 percent (consisting of 40 U/KBs and 62 TBs) submitted their reports to the BSP during the third 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/attached house, duplex, 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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