HOUSE PRICES throughout the Netherlands fell in the third quarter, the first contraction in more than three This is evident from data from the Bangko Sentral ng Pilipinas (BSP).
The Residential Real Estate Price Index (RREPI) fell by 2.3% year-on-year from July to September. This was a reversal from 2.7% growth in the second quarter and 12.9% growth in the same period a year ago.
This was also the first time the RREPI recorded a decline since the 9.4% decline in the second quarter of 2021.
The RREPI tracks the average price changes of homes across different home types and locations. The data provides insights to the BSP in monitoring the banking sector’s exposure to the housing sector.
Central bank data showed apartment prices fell 9.4% year-on-year, a reversal of 10.6% growth in the previous quarter and 8.3% increase a year ago.
Duplex unit prices fell 48.1% in the third quarter, reversing 27.1% growth in the second quarter and 57.7% growth in the same period a year ago.
On the other hand, single-family home prices rose 2.9% in the third quarter, faster than 1.7% in the previous quarter but much slower than the 16.8% growth a year ago.
Townhouse prices rose 0.7% from July to September, a reversal from the 0.8% decline in the second quarter. However, growth slowed from 9.3% growth in the same period a year ago.
BSP data shows that house prices in the National Capital Region (NCR) fell 14.6% in the third quarter, worse than the second quarter’s 1% decline and 12.3% growth last year.
On the other hand, house prices in areas outside NCR (AONCR) rose by 3% in the period ended September, declining from 4.2% and 14.3% in the second quarter and the comparable period a year ago, respectively.
In the third quarter, home loans granted for all types of new homes fell by 15.7% on an annual basis.
“Specifically, loans granted in the NCR and AONCR fell by 20.3% and 13% respectively,” the central bank said.
“Notably, the double-digit annual contraction in housing loans in the Philippines, NCR and AONCR in the third quarter of 2024 was significant, but not as severe as the decline in housing loan supply observed during the pandemic. , which started in the second quarter of 2020.”
BSP data also showed that the average assessed value of new homes in the Philippines in the third quarter was P86,417 per square meter (sqm).
The average assessed value in NCR was P135,076 per m², while the average assessed value in areas outside NCR was P60,804 per m².
Michael L. Ricafort, chief economist of Rizal Commercial Banking Corp., said relatively higher land prices and lease rates weighed on demand and led to a correction in housing prices.
Separate BSP data showed that banks and trust entities’ exposure to the real estate sector fell to 19.55% at the end of September from 19.92% at the end of June and from 20.55% at the end of September in 2023.
This was also the lowest real estate exposure ratio in five years or since 19.5% in September 2019.
“The latest decline could have been largely caused by the ban on Philippine Offshore Gaming Operators (POGO) that led to the withdrawal of POGO operations, leading to higher vacancy rates and increased supply of residential condominium units,” Mr. Ricafort said.
“As a result, prices and rentals fell as the POGO ban coming into effect on December 31 approached,” he added.
In a recent report, Colliers said the presale apartment segment in Metro Manila “continues to see increased remaining inventory life.”
“This forces developers to take a more cautious stance and temper new launches in the capital region,” the report said.
For next year, Colliers expects prices to rise faster than rents. This will be mainly driven by “sustained demand for luxury apartments in Metro Manila.”
“Colliers sees the increased vacancy likely resulting in snail-paced growth in rents and prices. From 2024 to 2026, we expect a rental and price recovery of between 2% and 2.5%,” the report said.
“We expect rents and prices to return to pre-corona levels by the second quarter of 2028 and the third quarter of 2029 respectively. The POGO sector is no longer a major driver of office space demand in Metro Manila and its impact is spreading to the condominium market.” — Luisa Maria Jacinta C. Jocson