Residential real estate prices increase in Q1 2024

Residential real estate prices of various types of new housing units in the Philippines continued to increase in Q1 2024, rising by 6.1 percent year-on-year (YoY), albeit at a slightly slower pace than the 6.5 percent growth in Q4 2023.

On a quarter-on-quarter (QoQ) basis, housing prices rebounded by 1.1 percent from the 3.6 percent decline in Q4 2023 (Figure 1).

By area, residential property prices increase YoY

in both the NCR and AONCR

On a YoY basis, residential property prices in the National Capital Region (NCR) rose by 2.8 percent in Q1 2024 as the growth in the prices of townhouses and condominium units outweighed the decline in the prices of single-detached/attached houses (Figures 1 and 2a).

Likewise, residential property prices in Areas Outside the NCR (AONCR) grew by 7.4 percent, driven by annual increases in the prices of all types of housing units (Figures 1 and 2b).

On a QoQ basis, residential property prices in AONCR rose by 4.1 percent, while those in the NCR declined by 5.6 percent (Figure 1).

Prices rise across all housing types

By housing type (excluding the duplex housing units), condominium registered the highest YoY growth rate in Q1 2024 (at 10.2 percent), followed by townhouses (at 5.6 percent), and single-detached/attached houses (at 5.1 percent) (Figure 2c).[2]

Similarly, on a QoQ basis, all housing types recorded price increases in Q1 2024. Excluding those of the duplex housing units, prices of townhouses grew the fastest (at 4.4 percent), followed by condominium units (at 0.5 percent), and single-detached/attached houses (at 0.4 percent) (Figure 2c).[2]

Nationwide loan availments for new housing units grow YoY,

but decline QoQ

In Q1 2024, the number of residential real estate loans (RRELs) granted for all types of new housing units in the Philippines grew by 8.9 percent YoY, with those from the NCR and AONCR rising by 3.2 percent and 11.4 percent, respectively. By contrast, nationwide housing loan availments fell by 24.2 percent QoQ due to the 35.3 percent and 18.2 percent decline in the number of RRELs in the NCR and AONCR, respectively (Figure 3a).

The total number of RRELs granted in the Philippines rose by 5 percent as the 8.5 percent growth in AONCR offset the 3.6 percent decline in the NCR. Meanwhile, the total number of transactions decreased by 23.2 percent QoQ, brought about by the 34.1 percent and 18.4 percent drop in the number of RRELs in the NCR and AONCR, respectively (Figure 3b).[3]

In Q1 2024, the appraised value of new housing units in the country averaged to Php82,260 per square meter (sqm), registering a 11.6 percent growth over the comparable year-ago level as opposed to the 7.6 percent contraction from the quarter-ago level. Likewise, the average appraised value per sqm in the NCR increased by 7.9 percent YoY but declined by 1.1 percent QoQ to Php132,743 per sqm. In the same way, the average appraised value per sqm in AONCR expanded by 18.9 percent YoY but declined by 6.2 percent QoQ to Php61,163. It may be noted that the average appraised value of properties in the NCR is more than double that of AONCR (Figure 4).

The weight of each type of housing unit in the RREPI is determined by dividing the total floor area (in sqm) of a specific type of housing unit over the total floor area of all housing types.[4] In Q1 2024, single-detached/attached houses continued to constitute the largest weight in the RREPI at 52.4 percent. Meanwhile, condominium units, townhouses, and duplex housing units accounted for 25.3 percent, 22.1 percent, and 0.3 percent in the calculation of the RREPI, respectively (Figure 5).

Profile of residential real estate loans in Q1 2024

In Q1 2024, 83.5 percent of residential real estate loan (RRELs) transactions were used to purchase new housing units.[5] Meanwhile, by type of housing unit, most of the residential property loans were used for the acquisition of single-detached/attached houses at 43 percent, followed by condominium units (34.7 percent), and townhouses (22 percent) as seen in Figure 6.

Most of the RRELs granted in the NCR were for the purchase of condominium units, while RRELs granted in AONCR were for the purchase of single-detached/attached houses. By region, 26.3 percent of the total number of RRELs granted were from the NCR. The other regions, which contributed significantly to the number of RRELS granted, were as follows: CALABARZON (34 percent), Central Luzon (13.3 percent), Western Visayas (6.6 percent), Central Visayas (6.1 percent), Davao Region (4.8 percent), and Northern Mindanao (2 percent). The said regions, including the NCR, comprised 93.1 percent of the total housing loans granted by banks (Figure 6).

About the report

The RREPI is a measure of the average change in the prices of various types of housing units, i.e., single-detached/attached houses, duplex housing units, townhouses, and condominium units, based on banks’ data on actual mortgage loans granted to acquire new housing units (excluding pre-owned or foreclosed properties). It is a chain-linked index, which is computed using the average appraised value per square meter, weighted by the share of floor area of each type of housing unit to the total floor area of all housing units. The RREPI is used as an indicator for assessing the real estate and credit market conditions in the country. The BSP has been releasing the report since June 2016.

Data for the RREPI are obtained through BSP Circular No. 892 dated 16 November 2015, which requires all universal/commercial banks (UBs/KBs) and thrift banks (TBs) in the Philippines to submit to the BSP a quarterly report on all RRELs granted. This was supplemented by the BSP Circular No. 1154 dated 14 September 2022, which requires all digital banks (DBs) in the country to submit similar reports to the BSP.

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[1] No index was generated for periods without bank loan transactions for duplex housing units in the NCR, as reflected by gaps in the series (orange line).

[2] Despite the duplex housing units registering the highest YoY and QoQ growth rates among housing types in Q1 2024, the number of transactions for duplex housing units were relatively low in Q1 2024 as it only accounts 0.28% of the 7,566 total number of new housing units sold on the said period. Majority of these duplex transactions were high-valued properties, which pulled the average upwards. Specifically, about 81% of the number of duplex loans granted had appraised values above the 3-year average of Php39,201 per sqm. Thus, for this section, the other housing types with a higher percentage of transactions (i.e., above 3%) were instead highlighted.

[3] The total number of RRELs granted in the Philippines includes all transactions for new, pre-owned, and foreclosed housing units.

[4] The weight is computed using loan transactions on new housing units only.

[5] On the remaining residential housing properties purchased using RRELs in Q1 2024, 16 percent were pre-owned, while 0.6 percent were foreclosed properties.