Residential real estate prices increase in Q3 2022

The residential real estate prices of various types of new housing units in the Philippines rose faster in Q3 2022 by 6.5 percent year-on-year (YoY) and 4.6 percent quarter-on-quarter (QoQ) (Figure 1).

By area, residential property prices increase YoY in the National Capital Region (NCR) and Areas Outside the NCR (AONCR), but decline QoQ in the AONCR.

On a YoY basis, residential property prices in the NCR and AONCR increased by 17.5 percent and 2.3 percent, respectively, primarily driven by the increase in the prices of condominium units and single-detached/attached houses, which outweighed the decrease in the prices of townhouses.

On a QoQ basis, residential property prices rose by 14.6 percent in the NCR, but contracted by 0.4 percent in the AONCR (Figure 1).

Likewise, prices rise across housing types, except townhouses.

In Q3 2022, prices of duplex housing units, condominium units, and single-detached/attached houses contributed to the YoY growth in the nationwide RREPI as these prices increased by 26.7 percent, 19.2 percent, and 9.8 percent, respectively. Meanwhile, prices of townhouses declined by 16.3 percent (Figure 2).

Similarly, the 4.6 percent QoQ growth in the RREPI may be attributed to the higher prices of condominium units (by 12.0 percent), duplex housing units (by 3.4 percent), and single-detached/attached houses (by 2.7 percent). Meanwhile, prices of townhouses declined (by -2.1 percent), QoQ (Figure 2).

Nationwide residential real estate loan availments for new housing units fall YoY, but grow QoQ.

In Q3 2022, the number of residential real estate loans (RRELs) granted for all types of new housing units in the Philippines fell by 4.2 percent YoY as RRELs in the NCR and AONCR contracted by 2.0 percent and 5.7 percent, respectively. By contrast, the nationwide availment of housing loans rose by 19 percent QoQ, following the 32.0 percent and 11.5 percent growth in RRELs in the NCR and AONCR, respectively (Figure 3).

The average appraised value of new housing units in the country stood at Php84,589 per square meter (sqm) in Q3 2022. The average appraised value per sqm in the NCR was at Php139,283, higher than both the national average and the average appraised value in the AONCR at Php47,129 (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. In Q3 2022, single-detached/attached houses in the RREPI continued to constitute the largest weight at 58.0 percent. Meanwhile, condominium units, townhouses, and duplex housing units accounted for 24.5 percent, 17.0 percent, and 0.4 percent, respectively (Figure 5).

Profile of residential real estate loans in Q3 2022

In Q3 2022, 82.2 percent of residential real estate loans (RRELs) were used to purchase new housing units.^[1] Meanwhile, by type of housing unit, most of the residential property loans were used for the acquisition of single-detached/attached houses (47.5 percent), followed by condominium units (39.0 percent) and townhouses (13.0 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 the AONCR were for the purchase of single-detached/attached houses. By region, 37.1 percent of the total number of RRELs granted were from the NCR, while the balance was from the AONCR as follows: CALABARZON (32.3 percent), Central Luzon (11.1 percent), Central Visayas (6.7 percent), Western Visayas (4.8 percent), Davao Region (2.8 percent), and Northern Mindanao (1.5 percent). NCR and the said six regions combined accounted for 96.3 percent of total housing loans granted by banks (Figure 6).

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 only.

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.

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^[1] Among the residential housing properties purchased using RRELs in Q3 2022, 16.9 percent were pre-owned, while 0.9 percent were foreclosed properties.