Bank lending to real estate sector rises by 10%
Big banks’ outstanding real estate loans further rose to P1.138 trillion as of the end of the first half amid sustained strong demand for properties.
Lending by universal and commercial banks to the real estate sector as of end-June was up from P950 billion a year ago, Bangko Sentral ng Pilipinas (BSP) data showed.
The bulk or P859 billion was borrowed for commercial projects—P443 billion went to land developers and construction firms, while P415 billion went to other borrowers.
Of the amount borrowed by construction companies and property developers, the chunk worth P198 billion was for residential units.
Banks had also given their go-ahead for P279 billion in loans for residential projects, of which P65 billion was intended for low-cost and socialized housing projects.
BSP data released in June showed that housing prices rose by almost a tenth in the first quarter but demand for residential units remained robust with no sign of a property bubble, officials had said.
The BSP’s newly launched indicator, called residential real estate price indices (RREPI), showed that real property prices rose 9.2 percent in 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 about seven out of every 10 residential real estate loans approved by banks in 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. Ben O. de Vera
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