Residential real estate prices increase in Q4 2022

Nationwide residential property prices rise by 7.7% YoY and 2.2% QoQ in Q4 2022

The residential real estate prices of various types of new housing units in the Philippines rose faster in Q4 2022 by 7.7 percent year-on-year (YoY), but slower at 2.2 percent quarter-on-quarter (QoQ), compared with Q3 2022 results (Figure 1).

By area, residential property prices increase YoY in the NCR and the AONCR, but decline QoQ in the NCR

On a YoY basis, residential property prices in the National Capital Region (NCR) grew by 16.1 percent as all types of housing units registered price increases. Meanwhile, in the Areas Outside the NCR (AONCR), residential property prices increased by 4.5 percent, with prices of all types of housing units rising, except for those of townhouses.

On a QoQ basis, residential property prices expanded by 4.8 percent in the AONCR, but contracted by 2.4 percent in the NCR (Figure 1).

Likewise, prices rise across all housing types, except townhouses

In Q4 2022, prices of duplex housing units, condominium units, and single-detached/attached houses contributed positively to the YoY growth in the nationwide RREPI as the indices increased by 42.9 percent, 12.9 percent, and 10.0 percent, respectively.^[1] By contrast, prices of townhouses contributed negatively for the second consecutive quarter, as the index contracted by 6.8 percent (Figure 2).

Meanwhile, the 2.2 percent QoQ growth in the RREPI was attributed to the higher prices of duplex housing units (by 37.6 percent), townhouses (by 8.9 percent), and single-detached/attached houses (by 3.2 percent). Prices of condominium units, however, declined (by 4.9 percent) QoQ (Figure 2).

Nationwide residential real estate loan availments for new housing units fall YoY and QoQ

In Q4 2022, the number of residential real estate loans (RRELs) granted for all types of new housing units in the Philippines fell by 10.3 percent YoY as RRELs in the NCR and AONCR contracted by 22.0 percent and 3.4 percent, respectively. Similarly, the nationwide availment of housing loans declined by 4.5 percent QoQ, following the 23.5 percent drop in RRELs in the NCR despite the 8.5 percent growth in RRELs in the AONCR (Figure 3).

The average appraised value of new housing units in the country stood at Php74,776 per square meter (sqm) in Q4 2022. The average appraised value per sqm in the NCR was at Php127,175, higher than both the national average and the average appraised value in the AONCR at Php49,475 (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 Q4 2022, single-detached/attached houses in the RREPI continued to constitute the largest weight at 57.2 percent. Meanwhile, condominium units, townhouses, and duplex housing units accounted for 22.5 percent, 19.8 percent, and 0.5 percent, respectively (Figure 5).

Profile of residential real estate loans in Q4 2022

In Q4 2022, 81.1 percent of residential real estate loans (RRELs) were used to purchase new housing units.^[2] Meanwhile, by type of housing unit, most of the residential property loans were used for the acquisition of single-detached/attached houses (47.2 percent), followed by condominium units (33.0 percent) and townhouses (18.9 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, 30.5 percent of the total number of RRELs granted were from the NCR, while the balance was from the AONCR as follows: CALABARZON (33.7 percent), Central Luzon (12.9 percent), Central Visayas (6.9 percent), Western Visayas (5.9 percent), Davao Region (3.0 percent), and Northern Mindanao (1.5 percent). NCR and the said six regions combined accounted for 94.4 percent of 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 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. 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 report to the BSP.

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^[1] Based on the average prices per sqm of duplex properties for the period, there were more high-value duplex loans granted in Q4 2022 vis-a-vis Q4 2021, causing the duplex index to rise significantly. Specifically, about 87% of the number of duplex loans granted had appraised values above the 3-year average of Php33,000 per sqm in Q4 2022 compared with only 46% in Q4 2021. Consequently, the average, median and minimum prices per sqm of duplex housing units grew y-o-y by 45.4 percent, 67.6 percent and 124.6 percent, respectively.

^[2] Among the residential housing properties purchased using RRELs in Q4 2022, 18.1 percent were pre-owned, while 0.8 percent were foreclosed properties.