Interest rates’ double-edged sword
The BSP’s aggressive monetary policy, which saw interest rates rise by 450 basis points between May 2022 and October 2023, has been a crucial factor influencing the property market. While higher borrowing costs have moderated the pace of growth, the sector has still managed to report moderate gains, indicating a robust demand that defies the cost of capital.
The number of real estate loans granted for new housing units surged by 30.5% year-on-year, further fueling the market’s growth. This increase was particularly pronounced in the NCR, which saw a 38.5% jump in residential real estate loans. The average appraised value of new housing units also rose, with properties in the NCR commanding a premium over the national average.
Diverse drivers of growth
The growth in Philippines’ property prices has been broad-based, with single-detached houses, townhouses, and condominium units all posting price increases. This diversity underscores the robust demand across different housing types, although duplex units bucked the trend with a significant price drop. The National Capital Region (NCR) and areas outside the NCR both contributed to the nationwide increase, highlighting the widespread nature of the property market’s expansion.
Looking ahead: A market poised for continued growth
As the Philippines’ property market navigates through higher interest rates and economic uncertainties, its sustained growth trajectory offers a bullish outlook for investors and homeowners alike. With strategic planning and a keen eye on market trends, stakeholders can capitalize on the opportunities presented by this dynamic sector.