Lockdown and COVID-19 could not stop Philippine home prices from rising in the second quarter of this year. The Bangko Sentral ng Pilipinas (BSP) revealed in its latest Residential Real Estate Price Index that demand for housing across the country is causing prices to rise in spite of the global pandemic.
Philippine home prices increased by 27.1 percent during the second quarter when compared to the same period last year. According to the BSP, this was the highest growth rate since it started compiling the datat in 2016.
Metro Manila saw some of the biggest gains with home prices in the National Capital Region skyrocketing by 34.9 percent. Condominium units and detached housing recorded the largest price increases in the second quarter. The Residential Real Estate Price Index also found that demand was strongest for luxury property.
And while Philippine home prices were on the rise, the number of property loans approved in the country fell by 55.2 percent during this time. Of the residential real estate loans granted, 62.7 percent went towards condominium units while 32.1 percent were used for houses.
BSP ups home loan limit to support economic growth
The BSP increased the real estate loan limit for the country’s major banks in August as it looked for ways to the reopening of the economy. The central bank provided an additional PHP1.2 trillion for real estate lending in the country.
The move keeps the exposure of banks to the real estate sector in line with the BSP regulation that states financial institutions can have an exposure to the property sector of no more than 20 percent. BSP Governor Benjamin Diokno highlighted the fact demand for property remained strong across the country which makes a real estate bubble unlikely.
“While there is persistent demand for residential properties, it would not indicate an asset bubble,” The Manila Times reported Diokno as saying. “We see both developments in both equities and real estate sector as mainly driven by market fundamentals. We see the price movements in both areas is within the long-run trend. Per the latest staff analysis, house prices do not indicate overvaluation at the moment.”