RESIDENTIAL real estate prices of various types of new housing units in the Philippines have contracted by 0.4 percent year-on-year (y-o-y) in the third quarter of 2020 based on the Residential Real Estate Price Index (RREPI), the Bangko Sentral ng Pilipinas said.

A similar trend was observed quarter-on-quarter (q-o-q) with the RREPI declining by 14.1 percent. This is the first time that the RREPI posted negative y-o-y growth since the start of the series in the first quarter of 2016.

The decline in the RREPI may be partly due to the weak consumer demand for houses and lots. This is consistent with the outcome of the third quarter 2020 Consumer Expectations Survey, which pointed to the low preference of consumers to buy real estate property amid the pandemic and economic uncertainty.

Residential property prices in the National Capital Region (NCR) declined by 12.2 percent relative to a year ago, while prices in areas outside of NCR (AONCR) grew by 6.4 percent.

In the NCR, the decrease in prices of condominium units and duplexes outweighed the increase in prices of single detached/attached houses and townhouses. Meanwhile, prices in AONCR rose across all types of housing units, except for the prices of duplexes in the same period.

Moreover, the change in residential property prices by type of housing units was mixed in the third quarter of 2020. Prices of condominium units and duplexes fell in the third quarter this year relative to the same period last year by 15 percent and 8.8 percent, respectively.

By contrast, townhouses and single detached/attached houses recorded a growth in prices at 12 percent and 7.4 percent, respectively, for the same period.

Residential loans

Moreover, during the third quarter of 2020, the purchase of new housing units accounted for 74.9 percent of residential real estate loans (RRELs). By type of housing units, most of the residential property loans were used for the acquisition of condominium units (48.7 percent), followed by single detached/attached houses (43 percent) and townhouses (7.9 percent).

Most of the RRELs granted in the NCR were for the purchase of condominium units, while RRELs granted in AONCR were for the purchase of single detached/attached houses.

By region, 46.5 percent of the total number of RRELs granted was accounted in the NCR, while the rest were distributed in AONCR Calabarzon (26.5 percent), Central Luzon (7.7 percent), Western Visayas (5.1 percent), Central Visayas (4.9 percent), Davao Region (2.8 percent) and Northern Mindanao (two percent). The NCR and the said six regions combined accounted for 95.5 percent of total housing loans granted by banks. (PR)