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Residential prices jumped 27% in Q2 despite pandemic—BSP

Residential real estate prices jumped 27.1 percent year-on-year in the second quarter, the highest growth rate recorded since the first quarter of 2016, according to the Residential Real Estate Price Index released by the Bangko Sentral ng Pilipinas Friday.

It said the increase was driven by higher demand for high-end projects, which pushed up the average price per square meter, and rising prices of construction materials, labor costs and other indirect costs, such as higher marketing costs of appraised premium properties.

“Further, in terms of area and type of housing unit, the highest contributors to the increase in housing prices were loans for the purchase of condominium units [particularly those in NCR] and single attached/detached houses. Low base effects also contributed to the price growth,” the BSP said.

Property consultancy firm Colliers International Philippines confirmed the strong demand for mid-income, upscale and luxury residential units in Metro Manila in the second quarter.

The BSP survey showed that residential property prices in NCR grew 34.9 percent in the second quarter from a year ago, higher than the 18.1-percent increase in the provinces.

All types of housing units registered an increase in prices in NCR, except for duplexes as no loans for the purchase of duplexes in the said area were granted and reported in the second quarter. The prices in areas outside NCR increased across all types of housing units.

Prices of condominium units rose the fastest at 30.1 percent in the second quarter while prices of single detached/attached houses, townhouses and duplexes increased by 24.1 percent, 10.8 percent and 0.8 percent, respectively.

Data, however, showed that the number of residential real estate loans granted by banks in the second quarter declined by 55.2 percent year-on-year and 54.9 percent quarter-on-quarter.

The average appraised value per sqm of new housing units climbed by 66 percent year-on-year and 24.2 percent quarter-on-quarter.

Property consultancy firm Colliers International Philippines said it was pleasantly surprised by the performance of the pre-selling residential market in Metro Manila, with take up increasing to 8,700 units in the second quarter from 8,600 units a year ago.

“In the first half of 2020, total sales reached close to 20,000 units, still a pretty good takeup compared to 22,000 units a year ago. That’s a decent sales performance given the country, particularly Metro Manila, was under a strict lockdown during the period,” SIP senior manager for research Joey Bondoc said.

“If you also look at the price segments of the more popular projects in the first half of 2020, the mid-income, upscale and luxury units covered 80 percent of total take-up in the pre-selling market, higher than the three segments’ 71-percent share. Note that these segments are priced from P3.2 million a unit and higher,” Bondoc said.

“We also saw price increases for selected pre-selling luxury projects in Mandaluyong, Quezon City, Makati fringe, and Ortigas Center in the first half,” he said.

Bondoc said the share of the lower-priced affordable segment (P1.7 to P3.2 million a unit) to total sales dropped from 26 percent last year to 16 percent in the first half of 2020.

“We still attribute the good sales performance during the period to attractive payment terms offered by developers. We see these flexible schemes being extended to buyers of mid-income to ultra-luxury projects. Developers’ shift to digital platforms also chipped in. The decent take up figures indicate that there is liquidity in the market,” Bondoc said.

Topics: Residential Real Estate Price Index , Bangko Sentral ng Pilipinas , Colliers International Philippines
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