Condominium unit and townhouse prices up but single detached house prices down in Q2 2017
Year-on-year, prices of condominium units and townhouses grew faster at 5.1 percent and 2.9 percent compared to the previous quarter, respectively.1 However, prices of single detached housing units declined by 9.9 percent. This drove the decline in the Residential Real Estate Price Index (RREPI) for Q2 2017 by 4.6 percent to 116.6 from 122.2 for the same quarter a year ago.2 Quarter-on-quarter, RREPI remained broadly steady. RREPI measures the average change in prices of various types of housing units comprising of single detached/attached house, duplex, townhouse, and condominium unit based on data from housing loans granted by universal, commercial, and thrift banks.
RREPI increases in the National Capital Region (NCR) but declines in Areas Outside NCR
The average residential property prices in NCR increased by 2.5 percent while those of AONCR declined by 8.2 percent in Q2 2017 compared to year-ago prices. In NCR, the higher growth in prices of condominium units offset the decline in prices of single detached houses and townhouses. Meanwhile, in AONCR the drop in prices of single detached houses outweighed the increases in prices of condominium units and townhouses.
Profile of residential real estate loans for Q2 2017
For Q2 2017, about eight in ten real estate loans were for the purchase of new housing units (75.3 percent). By type of housing unit, 45.3 percent of residential property loans were for the acquisition of single detached units, followed by condominium units (44.8 percent) and townhouses (9.6 percent). By area, condominium units were the most common house purchases in NCR while single detached houses were prevalent in AONCR. By region, NCR accounted for 44.9 percent of the total number of residential real estate loans granted during the quarter, followed by CALABARZON (28.9 percent), Central Luzon (6.7 percent), Central Visayas (5.7 percent), Western Visayas (5.7 percent), Davao Region (3.1 percent) and Northern Mindanao (1.3 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 100 banks covered, 99 banks or 99 percent (consisting of 46 U/KBs and 53 TBs) submitted their reports to the BSP which cover the second quarter of 2017. 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.
1 Prices of duplex units (which account for only 0.3 percent of total new housing units reported) also up by 5.1 percent year-on-year.
2 In the second quarter of 2017, the average cost per square meter of residential constructions decreased by 3.9 percent year-on-year based on Construction Statistics from Approved Building Permits of the Philippine Statistics Authority (PSA).