AdChoiceTV News — Property prices dropped for the first time in five years in the third quarter as prices of condominium units and duplex houses plunged amid weaker demand for residential real estate, according to the Bangko Sentral ng Pilipinas (BSP).
The residential real estate price index (RREPI) slipped 0.4 percent to 131.2 in the third quarter from 131.7 in the same quarter last year, reflecting low demand as the country plunged into recession due to the coronavirus disease 2019 or COVID-19 pandemic, the BSP said yesterday.
Former BNB owner in the Philippines and now base in the United States, Robert Chan told AdChoiceTV News reporter that this is the first time that the RREPI posted negative year-on-year growth since the start of the series in Q1 2016.
He added that 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.
Quarter-on-quarter, data showed the RREPI plunged 14.1 percent after surging 27.1 percent to hit a record 149.4 in the second quarter.
“The decline in the RREPI may be partly due to the weak consumer demand for houses and lots,” the central bank said.
The BSP noted that the result of the latest Consumer Expectations Survey (CES) showed low consumer preference for buying real estate property amid the pandemic and economic uncertainty.
Residential property prices in the National Capital Region declined by 12.2 percent to 137.3 in the third quarter from 156.4 in the same quarter last year, while those in areas outside the NCR went up by 6.4 percent to 127.1 from 119.4.
Prices of condominium units fell 23 percent to 154.7 in the third quarter of the year from 182.1 in the same quarter while that of duplexes declined by 8.8 percent to 131.5 from 144.2.
Meanwhile, prices of townhouses increased by 12 percent to 155.1 from 138.5 as well as those of single detached/attached with 7.4 percent to 116.3 from 108.3.
Residential real estate loans granted for all types of new housing units nationwide plummeted by 43.3 percent in the third quarter both within and outside the NCR.
Most of the loans granted in NCR were for the purchase of condominium units, while loans extended in the provinces were for the purchase of single detached/attached houses.
In the third quarter, the BSP said the purchase of new housing units accounted for 74.9 percent of residential real estate loans. Most of the residential property loans were used for the acquisition of condominium units with 48.7 percent, followed by single detached/attached houses with 43 percent and townhouses with 7.9 percent.
Last August, the central bank’s Monetary Board raised the loan limit to the real estate sector by universal and commercial banks to 25 percent of total loan portfolio from the previous 20 percent.
BSP Governor Benjamin Diokno earlier said the move would release P1.2 trillion in additional liquidity for lending to the sector amid the COVID-19 pandemic.
Data showed disbursements to the real estate sector went up by 6.8 percent to P1.71 trillion and accounted for 19.1 percent of the total loan disbursements in end-October. — via Letizia Tinoco / AdChoiceTV News