Housing prices drop for 1st time in 3 years

MANILA, Philippines — Property prices declined for the first time in three years as prices of duplex housing and condominium units slumped in the third quarter, the Bangko Sentral ng Pilipinas (BSP) said.

The residential real estate price index (RREPI) slipped by 2.3 percent to 163.9 in the third quarter from 167.7 in the same quarter last year. This was the first time the index contracted since the 9.4-percent decline in the second quarter of 2021.

On a quarterly basis, the RREPI went down by 1.6 percent from 166.5 in the second quarter, snapping two straight quarters of positive growth.

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, based on banks’ data on actual mortgage loans granted to acquire new housing units, excluding pre-owned or foreclosed properties.

The decline in property prices during the third quarter was mainly driven by the decrease in prices of duplex housing units as well as condominium units.

Based on BSP data, prices of duplex units fell by 48.1 percent to 136.1 in the third quarter from 262.4 a year ago, registering the lowest annual growth rate among all housing types.

However, the corresponding number of loan transactions for duplex units was low, as it only accounted for 0.15 percent of the 6,626 total number of new housing units sold in the third quarter 2024.

“The majority of duplex loan transactions were for low-value properties, which pulled the average price downwards. Specifically, 90 percent of the duplex units purchased through bank loans were appraised below the three-year average of P40,941 per square meter,” the BSP said.

Likewise, prices of condominium units decreased by 9.4 percent to 205.6 in the third quarter of the year from 226.9 in the same quarter last year.

Meanwhile, prices of townhouses slipped by 0.7 percent to 196 from 194.6 as well as those of single detached/attached with a 2.9-percent decline to 147 from 142.9.

By area, property prices declined by 14.6 percent in the National Capital Region to 172.5 in the third quarter from 201.9 in the comparable year-ago period. The RREPI in areas outside the NCR rose by three percent to 160.6 from 155.9.

Residential real estate loans (RRELs) granted for all types of new housing units nationwide dropped by 15.7 percent in the third quarter.

“Notably, the double-digit year-on-year contraction in RRELs in the third quarter of 2024 was significant, yet not as severe as the decline in housing loan availment observed during the pandemic, which began in the second quarter of 2020,” the BSP said.

Loans granted for new single houses went down by 24.5 percent, while those for new duplex housing units slumped by 76.7 percent. RRELs granted for new townhouses and condominium units declined by 0.7 percent and 13.2 percent, respectively.