Highlights:
Data from the Bangko Sentral ng Pilipinas (BSP) showed a 10.8-percent year-on-year drop in residential real estate loans for new housing during the fourth quarter. This followed double-digit contractions of 15.7 percent in the third quarter and 24.5 percent in the second quarter of last year.
The slowdown in loan activity was observed across both Metro Manila and provincial areas, with locations outside the capital recording a 13.7-percent annual decline and the national capital region posting a smaller 5.4-percent drop.
This downtrend suggests sustained hesitancy among homebuyers and banks amid high interest rates and economic uncertainty, even as property prices recovered from earlier weakness.
Nationwide, housing prices rose 6.7 percent year-on-year in the fourth quarter of 2024, reversing the 2.3-percent contraction in the previous quarter. But the price increase was largely driven by provincial areas, where prices rose 9.3 percent. In contrast, Metro Manila prices slipped by 0.4 percent, marking a slower pace of decline than the 14.6-percent plunge in the third quarter of 2024.
Loan uptake in key segments reflected these trends. Bank lending for single-detached/attached homes — the largest housing type by volume n— dropped 36.2 percent nationwide. Metro Manila suffered a sharp 60.8-percent contraction in this segment, while provincial areas dropped 34.6 percent.
Loans for townhouses also fell 13.9 percent nationwide, with a 15.8-percent drop in provincial areas outweighing a 6.2-percent increase in Metro Manila.
Surprisingly, condominium loans showed resilience despite the reported supply glut, rising 7.5 percent as a 23.9-percent surge in provincial areas offset a 2-percent dip in Metro Manila.
Despite the annual weakness, short-term figures suggest possible recovery. On a quarterly basis, housing loans rose 34.3 percent in the fourth quarter, with Metro Manila up 42.7 percent and provincial areas up 29.8 percent. This coincided with banks reporting stable credit standards for home loans during the period.
Price movements diverged further between Metro Manila and provincial areas. In the capital, townhouse prices dropped 4.9 percent, offsetting gains in single-detached homes (up 4.8 percent) and condominiums (up 4.3 percent).
Meanwhile, in provincial areas, all housing types except townhouses posted strong growth, led by a 12.8-percent rise in single-detached homes and 5.1 percent in condominiums.
The average appraised value of new housing units also climbed. Provincial areas registered a 25.8-percent increase in value per square meter to P81,983, outpacing Metro Manila’s 6.6-percent growth to P143,059. This reduced the pricing gap between the two markets.
