Housing prices registered the highest year-on-year growth rate since 2016, according to the latest data from Bangko Sentral ng Pilipinas (BSP), cited by Philstar.
The residential real estate price index (RREPI), the measure used for monitoring change in the prices of residential properties over a period of time, climbed to 27.1 percent. It hits a record 149.4 index points in the second quarter, a sharp increase from 117.5 in the same period in 2019.
The RREPI was introduced in the first quarter of 2016.
Growth Drivers
Explaining the increase, BSP reported that banks saw greater interest in luxury developments, thereby pulling up the average price per square meter (sqm). They also cite the soaring costs of construction materials and labor. Indirect expenses, such as higher marketing costs of assessed premium properties, likewise contributed to the growth in housing prices.
Financial institutions allowed a higher percentage of loans for properties with prices more than P100,000 per sqm. This segment represented almost half (49.5 percent) of total loans in the second quarter, a notable surge from 24.5 percent in the same quarter in 2019.
For this reason, the average price per sqm increased year-on-year by 66 percent, the median price by 122.9 percent, and the minimum price by 317.5 percent.
Share Per House Type
In the Lamudi Roundtable titled On the Horizon: Real Estate Leaders on Market Recovery, held virtually last September 10, some property experts have mentioned insights about the high-end market segment. Arch. Henry Yap, Business Unit General Manager of Robinsons Land Corporation (RLC), acknowledged the strong interest amid the current crisis.
“In the luxury market, the general sentiment is still high. These are people who take challenges in this type of crisis. They’re the ones who are willing to invest because they have the extra disposable income.
“They know that, based on experience, once the economy improves, they will earn a lot from them,” Yap said.
Meanwhile, Franco Soberano, EVP and COO of Cebu Landmasters Inc., reported in the first track of the virtual event Revive: Property Investment in the Post-Pandemic World that many of their luxury investors have retained their investments.
“A lot of investors have held on to their units. We’ve experienced less than two percent of cancellation. These are the P200,000 to P250,000 per sqm condo units. We’re happy to know that people are holding on to their units,” he mentioned.
He said that many are seeing the value of keeping investments in consideration of the long-term value appreciation of the properties.
The Appeal of Condo Investments
The industry leaders at the roundtable discussion agreed that the condo market is stable even at the height of the pandemic. Some property developers even noted sold-out projects three months into the implementation of community quarantine.
According to the chief executives, the growing interest may come from the support condominiums offer for new normal needs. The location, for one, is a big contributing factor. Situated in strategic areas, most condo developments are only a short walk or drive from essential establishments, such as supermarkets, malls, banks, and offices.
Aside from the convenience, condo dwellers are able to reduce time spent outside when securing essentials.
Another factor that may have driven interest for condos is the property management services. Homebuyers are now keen on finding a residence that’s well-maintained for their health and safety amid a global health emergency.
In condos, minimum health standards are observed, including temperature checks at entrances, installation of disinfection stations in key areas, and regular cleaning of facilities.
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Article and Photo originally posted by Lamudi last September 29, 2020.
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