Despite facing a global economic slowdown and rising interest rates, the Philippines’ property market has shown remarkable resilience, marking its 10th consecutive quarter of price growth. According to the Bangko Sentral ng Pilipinas (BSP), the Residential Real Estate Price Index (RREPI) witnessed a 6.5% increase in the fourth quarter of 2023, a testament to the sector’s enduring strength.
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.
