Home prices rebounded in the past quarter, driven by faster increases in residential real estate outside Metro Manila as more families considered building houses outside the city during a coronavirus lockdown, according to the central bank.
In a report released on Friday, the Bangko Sentral ng Pilipinas (BSP) said the Residential Real Estate Price Index inched up by 0.8% from October to December from a year earlier, bouncing back from the 0.4% contraction in the third quarter.
The growth rate was lower than 10.4% in the fourth quarter of 2019, and was the second slowest since a 0.5% rise in the last quarter of 2018.
On a quarterly basis, the index rose by 2.4% during the period, reversing a 14.1% quarter-on-quarter slump in the preceding three months.
“The positive year-on-year growth in the overall residential property prices was driven mainly by those in areas outside the National Capital Region,” BSP said in a statement, noting that the slump in property prices in the capital region continued for the second straight quarter.
The index gauges the average change in home prices across building types and locations and gives the central bank an insight into the property market, bank exposures to which is regulated.
Home prices outside Metro Manila climbed faster by 5.9% in the fourth quarter from 6.4% in the third quarter. But it was still slower than 8.3% in the fourth quarter of 2019.
All types of housing units in areas outside the capital region went up except for condominium units, which went down by 2.1%. The prices of duplex houses jumped by a fifth, town houses by 14.3% and single detached or attached houses by 4.2%.
More Filipinos seeking new homes outside the capital during a coronavirus pandemic might have caused the increase in home prices, according to Nicholas Antonio T. Mapa, a senior economist at ING Bank N.V. Manila.
“The Philippines is mirroring the global exodus out from major cities, with city dwellers trading in their flats for the clean and green of the suburbs outside the concrete jungle,” he said in an e-mailed note. “The ongoing lockdown, which spawned a growing army of plantitos and plantitas indicate that clean and green is the new standard.”
In Metro Manila, the home price index fell by 4.8% in the fourth quarter, softer than the 12.2% contraction in the third quarter. Year on year, home prices turned around from an 18.9% growth in the fourth quarter of 2019.
Residential property loans given by banks continued to fall by 3.6% year on year in past quarter, easing from a 43.3% drop in the previous quarter. On a quarterly basis, loans grew by three-quarters.
In the capital, loans for new homes went down in the past quarter but increased quarterly, BSP said. Loans to new housing units outside the capital region rose both from a year and a quarter earlier.
The central bank said 42.2% of the loans were given to buyers of condominium units, followed by single detached/attached houses (30.5%), townhouses (26.9%) and duplex units (0.4%).
“This is supported by the demand we saw during the pandemic in the latter half of 2020, when people were looking for horizontal project,” Colliers Philippines Research Manager Joey Roi H. Bondoc said by telephone.
He said they expect house prices to continue rising in areas outside the capital, driven by demand, increased government infrastructure spending and the appetite from migrant Filipino workers.