AFTER a sluggish third quarter, the Philippine residential real estate market staged a strong recovery in the fourth quarter of 2024, with property prices rising 6.7 percent year-on-year (y-o-y) and 5.3 percent quarter-on-quarter (q-o-q).
The latest data from the Residential Real Estate Price Index (RREPI) released by the Bangko Sentral ng Pilipinas signals renewed market confidence, fueled by rising demand for housing outside Metro Manila and an uptick in loan availments.
The price growth was driven largely by properties in Areas Outside the National Capital Region (AONCR), where residential prices jumped 9.3 percent y-o-y, buoyed by strong demand for single-detached/attached houses and condominium units. Conversely, Metro Manila (NCR) saw a marginal 0.4 percent y-o-y decline, although this was a notable improvement from the 14.6 percent drop recorded in the third quarter of 2024.
The mixed performance in the capital was mainly due to a contraction in townhouse prices, which offset gains in detached houses and condominiums.
However, both the NCR and AONCR showed q-o-q improvements, with prices increasing 5.7 percent and 4.8 percent, respectively.
When broken down by property type, single-detached/attached houses posted the highest y-o-y increase at 12.8 percent, reflecting a continued preference for larger living spaces. Condominium prices also climbed by 5.1 percent, signaling a rebound in demand after previous slowdowns.
On the other hand, townhouses saw a 3.4 percent y-o-y decline, making them the only housing segment to experience a downturn. However, on a quarterly basis, all housing types recorded price increases, suggesting broad-based recovery.
The number of residential real estate loans (RRELs) granted for new housing units fell by 10.8 percent y-o-y, marking the third consecutive quarter of contraction. However, this was an improvement from the 15.7 percent decline in the third quarter of 2024, indicating that lending activity is stabilizing.
Metro Manila saw a 5.4 percent y-o-y drop in home loans, while the decline in AONCR was slightly steeper at 13.7 percent. Notably, loan availments surged by 34.3 percent q-o-q, with NCR recording a 42.7 percent jump and AONCR rising by 29.8 percent. This turnaround aligns with the Fourth Quarter of the 2024 Senior Bank Loan Officers’ Survey (SLOS), which reported unchanged credit standards for housing loans, following a net easing in the previous quarter.
Condominium loans rising
Loans contracted sharply by 36.2 percent y-o-y for single-detached/attached houses, the steepest drop since the pandemic, though q-o-q figures showed marginal improvement.
Loan availments for townhouses fell 13.9 percent y-o-y, driven by a 15.8 percent decline in AONCR. However, q-o-q growth of 2.3 percent suggests a gradual recovery.
Condominiums are a standout performer, with 7.5 percent y-o-y growth nationwide. AONCR saw a 23.9 percent surge, offsetting a slight two percent dip in the NCR. The segment posted an impressive 74.4 percent q-o-q increase, highlighting renewed buyer interest.
The appraised value of new housing units nationwide reached P104,369 per square meter in the fourth quarter of 2024, up 17.2 percent y-o-y and 20.8 percent q-o-q.
Metro Manila’s average property value rose to P143,059 per square meter, marking a 6.6 percent y-o-y and 5.9 percent q-o-q increase. AONCR saw a stronger appreciation at P81,983 per square meter, up 25.8 percent y-o-y and 34.8 percent q-o-q, indicating faster price acceleration outside the capital.
This trend suggests that the affordability gap between Metro Manila and regional markets is narrowing, as more buyers look beyond the NCR for investment opportunities.
The RREPI is a measure of the average change in the prices of various types of housing units, like 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 (excluding pre-owned or foreclosed properties). /KOC