BSP: PH home price growth hit record-low in Q3
Home prices rose at a record-low pace in the third quarter, even as housing loan volumes increased, as a more balanced supply helped keep costs in check despite brisker borrowing and buying activity.
The cost of various types of homes in the country, as measured by the residential property price index (RPPI), edged up 1.9 percent from a year earlier in the three months through September, the Bangko Sentral ng Pilipinas (BSP) reported on Friday.
That marked the weakest annual gain in data going back to 2020. On a quarterly basis, the index fell 3.8 percent, its sharpest decline on record.
The RPPI—which serves as a valuable tool for assessing the real estate and credit market conditions in the Philippines—replaced the previous gauge called the residential real estate price index. The BSP said the RPPI improved on the previous index by incorporating property-specific characteristics, such as location, size and type.
By type of dwelling, condominium prices increased 1.4 percent from a year earlier in the third quarter, reversing a 0.2-percent decline in the previous quarter. House prices rose 1.9 percent, in line with the broader trend.
The slowdown in price growth was more pronounced outside the capital, where annual gains moderated to a record-low 1.6 percent, reflecting a sharp deceleration in both condominium and house prices.
In the National Capital Region (NCR), where there is an oversupply of condos in some cities, home prices edged up by 2.3 percent, the lowest since the 1.9-percent decline in the fourth quarter of 2023.
The muted rise in prices came despite robust borrowing by homebuyers. The central bank said the number of housing loans climbed 24.6 percent in the third quarter, the strongest growth since the final three months of 2023.
In the NCR, home loan volumes rebounded after three straight quarters of contraction to post 1-percent growth, while lending in areas outside Metro Manila surged to a four-year high of 31.7 percent.
This, amid the ongoing easing cycle of the BSP to support economic growth. Since August last year, the central bank has trimmed the benchmark rate guiding bank lending costs by 2 percentage points to 4.5 percent, with Governor Eli Remolona Jr. signaling that the rate-cutting run is nearing its end.
Robert Dan Roces, group economist at SM Investments, said the slowdown in home price growth reflected “a rebalancing rather than a demand collapse.”
“Housing loan volumes are rising largely because affordability has improved—rates have stabilized, banks are more willing to lend and buyers are shifting toward smaller units and mass-market segments—while supply, especially outside the capital, has continued to come onstream,” Roces said.
“This keeps price pressures muted despite strong credit growth,” he added.
