Philippines home prices post slowest growth in 7 years

MANILA, Philippines — Residential property price growth nearly stalled in the second quarter, posting its weakest annual increase since the Bangko Sentral ng Pilipinas (BSP) began the current data series in 2019 as falling prices outside Metro Manila offset stronger gains in the capital region.

Data from the BSP showed that the Residential Property Price Index (RPPI) rose by just 0.4 percent year on year in the second quarter, sharply slower than the 4.5-percent increase in the first quarter and 7.5-percent growth recorded a year earlier.

The latest reading was the slowest since the series began in the first quarter of 2019.

The RPPI tracks changes in the prices of residential properties acquired through bank housing loans, providing a gauge of movements in the formal housing market.

On a quarterly basis, nationwide residential property prices were nearly flat, increasing by only 0.1 percent after a 5.6-percent rise in the first quarter.

The slowdown reflected diverging trends across regions.

Property prices in the National Capital Region (NCR) climbed by 5.2 percent from a year earlier, accelerating from 3.5 percent in the first quarter and 2.4 percent a year before.

In contrast, prices in areas outside the NCR fell by 2.7 percent, marking their first annual decline in the series. This reversed the 5.7-percent increase in the previous quarter and an 11.5-percent surge a year ago.

The BSP said price declines outside Metro Manila were broad-based. Prices in other areas of the Philippines dropped by 5.3 percent, while Balance Greater Manila Area, covering Batangas, Bulacan, Cavite, Laguna, Pampanga and Rizal, posted its first annual contraction at three percent.

Metro Cebu prices slipped by 0.2 percent, while Metro Mindanao was the only major area outside the capital to register an increase, at 2.1 percent.

Despite the broader slowdown, condominium units continued to rise with prices increasing by six percent year on year in the second quarter, faster than the 4.6-percent growth in the previous quarter.

House prices, meanwhile, fell by 4.1 percent after rising by 3.9 percent in the first quarter. Houses include single-detached homes, townhouses, duplexes and apartments.

The weakness in house prices was seen in both major regions. House prices dropped by 3.1 percent in the NCR and by 4.5 percent in areas outside NCR.

Condominium prices, on the other hand, rose by 7.4 percent in Metro Manila and by 3.4 percent outside the capital.

Housing loan activity remained positive nationwide but also showed a wide regional gap.

The number of residential real estate loans granted increased by 3.1 percent from a year earlier, supported by an 11-percent jump in the NCR. Lending in areas outside NCR, however, slipped by 0.1 percent.

Loans for condominium units surged by 18.1 percent nationwide, while loans for houses declined by 6.8 percent.

The BSP said the drop in house lending reflected weaker activity across areas outside Metro Manila, which outweighed renewed growth in the NCR.