Home prices firm up despite ‘oversupply’ concerns
Home prices in the country resumed their uptrend in the fourth quarter of 2024 as demand for residential property outside the National Capital Region (NCR) made up for the slack in the metropolis.
Residential real estate prices increased by 6.7 percent year-on-year in the fourth quarter, rebounding from the 2.3-percent decline in the third quarter, according to a report released by the Bangko Sentral ng Pilipinas (BSP) on Friday.
Home prices also saw a significant turnaround on a quarter-on-quarter basis, rising by 5.3 percent following a 1.6-percent decline in third quarter 2024.
The property price increase was more pronounced in areas outside the NCR, where residential property values rose 9.3 percent year-on-year, driven by all housing types except townhouses.
Better picture outside NCR
In contrast, property prices in NCR recorded a 0.4 percent contraction, albeit this improved from the 14.6-percent drop in the previous quarter.
“This was primarily driven by decline in townhouse prices, which effectively offset the price increases in single-detached/attached houses and condominium units,” the BSP said in its report.
To recall, home prices in the Philippines contracted for the first time in three years in the third quarter of 2024 amid a high-interest rate environment that curbed bank lending to homebuyers. Recently, there have been concerns about an oversupply of residential property units in the metropolis.
By type of development, the central bank reported that single-detached and attached houses had recorded the highest year-on-year price increase of 12.8 percent in the fourth quarter of 2024.
This was followed by a 5.1-percent upswing in condominium unit prices. Townhouses, in contrast, softened by 3.4 percent year-on-year.
Real estate loans
Meanwhile, the number of residential real estate loans granted for new housing units continued to decline, although at a slower pace. The year-on-year contraction eased to 10.8 percent from 15.7 percent in the third quarter.
In the NCR, loans granted to homebuyers fell by 5.4 percent from the same period last year, a notable improvement from the steeper 20.3 percent decline in the previous quarter.
In areas outside the NCR, fourth quarter home loan approvals declined by 13.7 percent, around the same pace seen as the 13-percent contraction in the third quarter of last year.
This marked the third consecutive quarter of decline in residential real estate loans across all segments.
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