Real estate loans rose to P1.33T in end-March

REAL estate loans continued to expand, although at a slower pace, to P1.33 trillion at the end of the first quarter in line with strong demand for properties amid the robust economic growth, the latest Bangko Sentral ng Pilipinas (BSP) data showed.

Lending by banks and their trust departments as of end-March inched up by 1.8 percent from P1.31 trillion a quarter ago and by 21.7 percent from P1.09 trillion a year ago.

The quarter-on-quarter rise was slower than the 6-percent growth posted in December last year.

BSP data showed that the bulk or P1.33 trillion of end-March real estate loans were released by banks, while the remaining P5 billion were by trust departments.

Loans for residential real estate amounted to P462.4 billion while those for commercial properties reached P869 billion.

Gross nonperforming real estate loans stood at P28.4 billion as of end-March, up from the P27.2 billion in a bad loans a quarter ago.

As the increase in bad loans outpaced total real estate lending, the share of gross nonperforming loans increased to 2.3 percent from 2.1 percent as of end-December last year.

As a share of banks’ total loan portfolio, the real estate loans ratio rose to 20.8 percent from 20.4 percent three months prior.

BSP data released last month showed that housing prices jumped by almost a tenth during the first quarter but demand for residential real estate remained robust, with no sign of a property bubble, officials had said.

The BSP’s recently launched indicator dubbed residential real estate price indices (RREPI) showed that real property prices rose 9.2 percent during the first three months of 2016, faster than the growth rate of 5.1 percent a quarter ago.

RREPI “measures the average changes in prices of different types of housing units over a period of time across different geographical regions where the growth rate of the index measures house inflation,” the BSP explained.

The RREPI also showed that around seven out of every 10 residential real estate loans given the go-ahead by banks during the first quarter were to be spent on buying new housing units.

Within the National Capital Region, condominium units were the most popular purchases; in areas outside Metro Manila, single detached houses were the most sought after, RREPI showed.

The RREPI data “represented a vibrant housing industry in the Philippines,” BSP Deputy Governor Diwa C. Guinigundo had said.

According to Guinigundo, “asset price inflation is quite remote” in the country because real estate purchases were being “driven by demand, not oversupply.”

BSP Governor Amando M. Tetangco Jr. had also maintained that there remains no property bubble in the country, although monetary authorities continue to monitor property prices.