Metro Manila Leads Q1 2025 Residential Price Surge

Residential property prices in the Philippines rose by 7.6 percent year-on-year in the first quarter of 2025, with Metro Manila recording the highest regional increase.

This marks a slight deceleration from the 9.8 percent annual growth registered in the fourth quarter of 2024.

The National Capital Region (NCR) saw a 13.9 percent year-on-year jump in residential property prices, far surpassing the 3.0 percent increase in areas outside the NCR.

Condominium prices rose 10.6 percent, while house prices increased 4.5 percent, according to the latest Residential Property Price Index (RPPI) released by the Bangko Sentral ng Pilipinas (BSP).

The RPPI tracks the movement of residential real estate prices across various housing categories based on bank loan data for actual property purchases.

Housing types covered include single-detached and attached homes, apartments, townhouses, and duplexes.

The BSP began using a revised RPPI methodology in Q1 2025 to more accurately reflect market trends and price movements.

The updated RPPI now incorporates hedonic regression, a statistical model that accounts for differences in property characteristics such as size, location, and type.

This replaces the earlier methodology that used simple averages and assumed uniformity across property types.

“The newly launched RPPI adheres to global best practices and serves as a more reliable gauge of housing price trends,” the BSP said in its report.

The revised index includes prices from new, pre-owned, and foreclosed units and is based on actual acquisition costs instead of appraised values.

By applying the RPPI retrospectively to data from Q1 2019 through Q4 2024, the BSP found that the improved method yields more stable trends even amid shocks like the COVID-19 pandemic.

Real estate analysts note that the sharp NCR price growth reflects ongoing demand for high-density vertical housing and limited land supply in Metro Manila.

Developers continue to focus on urban centers where infrastructure and business activity fuel residential demand, particularly in the PHP 5 million to PHP 15 million segment.

The BSP monitors the RPPI closely as part of its broader assessment of credit and housing market conditions.

The central bank said the RPPI helps flag potential systemic risks in real estate lending and supports data-driven policy decisions.

Despite the slower nationwide growth, the BSP noted that property values remain on an upward trajectory, driven by sustained urban demand and the broader economic recovery.