Home prices sustain uptrend, but housing loans soften amid rate hikes
MANILA, Philippines — Housing prices still shot up in the final quarter of 2022 despite loan growth softening as borrowing costs turned expensive.
Data released by the Bangko Sentral ng Pilipinas on Friday showed that Residential Real Estate Price Index, a measure of average change in the prices of various types of housing units, improved 7.7% year-on-year in the fourth quarter. This was faster than the 4.9% recorded in 2021.
On a quarterly basis, housing prices softened 2.2% in the fourth quarter. This was markedly slower than the 4.6% quarter-on-quarter growth recorded in the July-September period.
Introduced in the first quarter of 2016, the RREPI is based on banks’ data on actual mortgage loans granted to acquire new housing units only.
BSP data showed bank loans taken out to purchase new houses plunged 10.3% year-on-year in the fourth quarter. The decline came as loans within and outside Metro Manila retreated.
To recall, the BSP has turned hawkish this year to fight multi-year high inflation, a move that would increase borrowing costs for several type of loans, including home loans. The BSP noted in its last meeting that their aggressive interest rate hikes is already hampering loan growth.
Broken down, prices of shelter in Metro Manila ballooned to 16.1% year-on-year in the fourth quarter, slower compared to the 16.1% recorded in the previous quarter. Prices of all housing units all trended up.
Quarter-on-quarter, home prices in the National Capital Region sank 2.4%. Outside Metro Manila, prices grew 4.5% year-on-year in the fourth quarter.
"What’s clear is that the outsized concerns about accommodative monetary policy during economic recession can be allayed further as growth in real estate prices remain healthy and in line with the growth of the economy," Nicholas Mapa, senior economist at ING Bank in Manila, said. — Ramon Royandoyan
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