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Residential Real Estate Prices Generally Stable in Q4 2016


Residential real estate price index (RREPI) nearly unchanged

Residential real estate prices edged higher by 0.3 percent in Q4 2016, as the RREPI rose to 113.9 from 113.6 for the same quarter a year ago. The slight year-on-year growth in residential real estate prices was slower compared to the 2.2 percent increase registered a quarter ago. While the growth in prices of townhouses accelerated to 6.2 percent (from 4.9 percent in Q3 2016) year-on-year, those of condominium units slowed down to 1.8 percent (from 3.1 percent a quarter ago). Meanwhile, those of single detached units contracted by 1 percent (from 2.4 percent rise in the previous quarter).  Although a decline was noted in the average price of single detached units, the number of loans granted for this type of housing unit remained in an uptrend, registering a 7.2 percent growth from its year-ago level. The RREPI measures the average change in prices of various types of housing units covering single detached/attached house, duplex, condominium, and townhouse based on data from housing loans granted by banks.
RREPI increases in Areas Outside the National Capital Region (AONCR) but declines in NCR

The growth in RREPI, which is a composite index of the residential price indices in the NCR and AONCR, was due to the increase in the average residential prices in AONCR by 1.7 percent in Q4 2016, outweighing the decline in prices in NCR by 1.1 percent. 

Profile of residential real estate loans for Q4 2016

For Q4 2016, about seven in ten real estate loans were for the purchase of new housing units                 (70.5 percent). By type of housing unit, 48.1 percent of residential property loans were for condominium units, followed by single detached units (43.9 percent) and townhouses (7.6 percent). All types of housing units registered increases in the number of loans granted compared to their year-ago levels, with condominium units posting the highest growth of 37 percent. By area, condominium units were the most common house purchases in NCR while single detached houses were dominant in AONCR. By region, NCR accounted for 51.6 percent of the total number of residential real estate loans granted during the quarter, followed by CALABARZON (25.6 percent), Central Luzon (5.8 percent), Central Visayas (4.7 percent), Western Visayas (3.9 percent), Davao Region (3.8 percent) and Northern Mindanao (1.5 percent). Together, these seven regions accounted for 96.9 percent of total housing loans granted by banks. Notably, these seven regions as well as SOCCSKSARGEN and the Cordillera Administrative Region (CAR) showed generally increasing trend in the number of loans granted since Q2 2015.

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 101 banks covered, 98 banks or 97 percent (consisting of 41 U/KBs and 57 TBs) submitted their reports to the BSP which cover the fourth 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 new housing units.

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