MANILA -Home prices in the Philippines rose in the second quarter, defying expectations of a decline even as rising interest rates have started to crimp home loans, the Bangko Sentral ng Pilipinas (BSP) reported on Wednesday.
The residential real estate prices of various types of new housing units in the Philippines rose 14.1 percent year-on-year in the second quarter, faster than the preceding quarter’s 1.4 percent.
But quarter-on-quarter, home prices jumped 5.3 percent in the April-June period, slower than the 10.2-percent sequential growth posted in the first quarter.
The BSP uses banks’ data on actual mortgage loans granted to acquire new housing units to gauge home price growth.
According to the central bank, prices of duplex housing units (4.8 percent), single-detached/attached houses (6.7 percent), townhouses (3.7 percent) and condominium units (3.8 percent) all rose year-on-year in the second quarter.
“Rising cost of living and the economic reopening pushed up real estate prices. It would be noted that these prices rose when rates are most elevated,” Nicholas Mapa, senior economist at ING Bank in Manila, said.
Indeed, while prices of shelter sustained their ascent, there are streaks of data indicating that the property market is already feeling the impact of the BSP’s aggressive rate hikes.
Figures showed loans granted by banks to homebuyers declined 1 percent year-on-year after seeing a 16-percent year-on-year growth in the first quarter. Home loans in the National Capital Region sagged 11.8 percent on an annual basis.
Quarter-on-quarter, home loans fell by a bigger 4.2 percent, albeit softer than the 9.1-percent sequential contraction in the first quarter.
“The drop in housing loans shows that would-be buyers are unable to afford new housing which would explain the drop in private construction activity in second quarter [economic output],” Mapa said. “Those who could afford had to contend with higher housing prices and expensive loans just to push through with a housing purchase.”