Young and monied buying houses, tempering PH price spikes

With residential real estate prices in Metro Manila sustaining a decline, average housing prices nationwide registered just a slight uptick by 0.3 percent year-on-year during the fourth quarter of 2016.

The Bangko Sentral ng Pilipinas’ (BSP) latest residential real estate price index (RREPI), which measures the average change in prices of all types of housing units across the country, was nearly unchanged at 113.9 during the October to December period from 113.4 in the third quarter of 2016 and 113.6 during the fourth quarter of 2015.

In terms of the actual increase in prices of housing units nationwide, the 0.3-percent year-on-year growth posted in the fourth quarter was slower than the 2.2 percent a quarter ago and 5.2 percent a year ago.

BSP Deputy Governor Diwa C. Guinigundo attributed the low housing inflation to “strong domestic demand in the Philippines for both residential and commercial properties.” The growth rate of the index measures house price inflation, the BSP explained.

“We have a large shortage of housing units supported by a big base of young, employed people, especially in the services sector. As the economy continues to grow, demand for commercial space will be sustained. At the same time, our real estate developers have become more prudent by doing due diligence of the market as they learned their lesson during the Asian financial crisis.”

He said this strong growth indicator could also be seen outside the National Capital Region. He cited the construction boom in Cagayan de Oro and Iloilo.

Between October and December, prices of single detached/attached houses declined 1 percent year-on-year, while those of duplex units dropped 12.3 percent.

The prices of townhouses and condominium units, meanwhile, rose 6.2 percent and 1.8 percent year-on-year, respectively, in the fourth quarter.

In the National Capital Region (NCR), the fourth-quarter index stood at 114.9, lower than the previous quarter’s 115.4 and the previous year’s 116.2.

Across all types of houses, average prices in NCR declined 1.1 percent year-on-year, sustaining the 0.2-percent decline in the third quarter while reversing the 5.8-percent rise during the fourth quarter of last year.

In NCR, prices of single detached/attached houses slid 8.6 percent year-on-year, while duplex prices dropped 8.8 percent.

Prices of townhouses and condominium units in NCR inched up 0.1 percent and 1.3 percent, respectively.

In areas outside NCR, the fourth-quarter index rose to 113.2 from 112.2 in the third quarter and 111.3 during the fourth quarter of 2015.

The average growth rate in prices of housing units in areas outside NCR eased to 1.7 percent from 4.9 percent a quarter ago and 6.2 percent a year ago.

Prices of single detached/attached houses declined 0.2 percent year-on-year between October and December, while those of duplex units, townhouses and condominium units rose 5.5 percent, 16.3 percent and 6.4 percent, respectively.

As for residential real estate loans recorded between October and December, the BSP said seven out of every 10 loans made were for purchases of new houses.

“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,” the BSP said.