Property prices continue to drop

by Lawrence Agcaoili – The Philippine Star, 27 Sep 2021

MANILA, Philippines — The year-long slump in the prices of condominium units dampened the national housing prices for the second straight quarter amid weak demand caused by the impact of the pandemic.

The Bangko Sentral ng Pilipinas (BSP) said the prices of condominium units fell for the fourth straight quarter, contracting by 14.3 percent in the second quarter from a year ago due mainly to the lackluster demand for condominium units in the National Capital Region (NCR).

This pulled down the Residential Real Estate Price Index (RREPI) for the second straight quarter, declining by 9.4 percent to 138.5 in the second quarter from a year-ago level of 152.8.

“In the second quarter of 2021, the nationwide house prices contracted by 9.4 percent year-on-year from -4.2 percent in the first quarter due to the continued effects of the pandemic on the residential property demand,” the BSP said.

Despite rising COVID cases, the RREPI peaked at 152.8 in the second quarter of 2020 due to the significant decrease in the proportion or the weight of properties valued at less than P100,000 per square meter.

“High base effects may also have contributed to the drop in prices given the registered peak of the index in the second quarter of 2020,” the central bank said

Likewise, data showed the price of single-detached housing units also shrank by 7.4 percent to 118.1 in the second quarter from 127.5 in the same quarter last year.

In contrast, the price of duplex housing units surged by 28.9 percent to 144.7 from 112.3, while that of townhouses went up by 15.1 percent to 174.7 from 151.8.

As more families return to the provinces as the country continues to struggle to contain the pandemic, property prices in NCR fell by 18.3 percent to 147.6 from 180.6, marking four consecutive quarters of decline since the third quarter of last year.

“The decline emanated from the negative price changes of single detached, condominium and townhouse units in the NCR. In the case of duplex housing, no bank loans were granted and reported to the BSP in Q2 2021,” the central bank said.

Likewise, the BSP said property prices in areas outside NCR slipped marginally by 0.6 percent to 133.9 from 134.7 as the drop in the prices of single detached or attached houses more than offset the growth in the prices of townhouses, duplexes and condominium units.

Quarter-on-quarter, property prices increased by 4.8 percent to 138.5 in the second quarter from 132.2 in the first quarter.

Real estate prices in NCR increased by 3.4 percent, while prices in areas outside NCR went up by 5.1 percent.

The BSP said the number of real estate loans granted for all types of new housing units soared by 82.3 percent in the second quarter.

The RREPI, launched in the first quarter of 2016, is used as an indicator for assessing the real estate and credit market conditions in the country.