Today I Learned: More Filipinos are Buying Single Detached Houses Vs Condos or Townhouses

A majority of Filipinos prefer to buy single-detached or attached houses over condominiums, townhouses, or duplexes, according to the latest residential real estate price index (RREPI) report of the Bangko Sentral ng Pilipinas (BSP).

In a news statement, the BSP said, of the total real estate loan transactions (RREL) in the second quarter of this year, 78.7 percent were used to purchase new housing units.

“By type of housing unit, most of the residential property loans were used for the acquisition of single-detached/attached houses at 47.9 percent, followed by condominium units (32.5 percent), and townhouses (19.3 percent).” The BSP, however, failed to say how much loans were actually granted for the quarter; its website only show the first quarter of the year as the latest data. 

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By regions, however, residents of Metro Manila, or the National Capital Region (NCR) borrowed to buy condominiums, while those in areas of outside of the NCR (AONCR) bought single-detached/attached houses. Those living in the Calabarzon region accounted for 30.1 percent of the RRELs, followed by NCR (29.7 percent), Central Luzon (13 percent), Central Visayas (eight percent), Western Visayas (seven percent), Davao Region (4.4 percent), and Northern Mindanao (3.3 percent).

Overall, the BSP noted that there were only 6,424 new housing units purchased in the second quarter of the year, as expressed in the number of RRELs granted, down by 3.5 percent from 6,600 housing units in the same period in 2023. Specifically, there were just 1,974 new housing units purchased in NCR, a decrease by 9.2 percent, year-on-year (YoY), while in AONCR, the decline was a slim 0.8 percent to 4,450 housing units, YoY.

High interest rates hang on homebuyers

“On a quarterly basis, nationwide housing loan availments fell by 15.1 percent, following the decline in the NCR and AONCR of 11.5 percent and 16.6 percent, respectively,” said the BSP. In a recent news briefing, Leechiu Property Consultants (LPC) said “the high interest rate environment will continue to be a factor for new and existing sales.”

Separate BSP data showed average lending rates among commercial banks and universal banks in general ranged between 7.754 percent and 12.572 percent as of May 2024, slightly higher than the 7.446 percent and 12.022 percent range in May 2023.

In an interview, LPC Director of Research and Consultancy Roy Golez, explained: “There is a shift in demand for housing in developments outside Metro Manila. Projects there are attracting buyers because they can be more affordable, more spacious, and can be located in integrated township developments that offer simulated city conveniences. That, with the improving connectivity because of new infrastructure developments, makes them appealing to home buyers.”

Potential township “hotspots” in the north, for instance, are in areas around the Clark International Airport such as Filinvest Mimosa, Clark Global City, The Infinity (Angeles City), Rockwell at Nepo (Angeles City), and Alviera (Porac), he added. 

Condo prices rising faster

That said, the residential real estate prices covering different types of new housing units in the country rose by 2.7 percent in the second quarter of 2024, YoY, although the pace was slower than the 6.1-percent growth in the first quarter, YoY. On a quarterly basis, the BSP reported that “housing prices grew faster at 1.8 percent, than the 1.1-percent growth in the first quarter of 2024.”

Active homebuyers in the NCR may want to look at buying a house, instead of a condominium, as the BSP noted residential property prices slipping by one percent in the region in the second quarter, YoY. It attributed the contraction in prices to “the decline in the prices of single-detached/attached houses outweighing the increase in the prices of townhouses and condominium units.” 

In contrast, the residential property prices in AONCR increased by 4.2 percent in the second quarter, YoY.  “This growth was driven by the annual price increases in duplex housing units, single-detached/attached houses, and condominium units, which surpassed the decline in townhouse prices,” the BSP added. Compared to the first quarter, residential property prices in the NCR and AONCR rose by 3.8 percent and 1.2 percent, respectively. 

Excluding duplexes, the price of condominiums increased the most at 10.6 percent YoY, followed by 1.7 percent in single-detached/attached houses, while the price of townhouses dipped by 0.8 percent. On a quarterly basis, prices of condominiums grew fastest at 4.2 percent, followed by single-detached/attached houses at 3.2 percent, while duplexes and townhouses registered a 2.3 percent and 2.6 percent decline, respectively. 

737K condo units in Metro Manila

LPC earlier reported that in Metro Manila, there are 737,000 total condo units, 578,000 units of which are ready for occupancy, while 159,000 are still preselling from the third quarter to 2031, by estimates. Those in preselling stage are already 69 percent sold, with new projects rising in Alabang and its immediate areas, Manila, and Quezon City.

“Pipeline units in the Bay Area and Ortigas form the bulk of the Metro Manila condo stock,” said Golez.

Meanwhile, the BSP noted that in the second quarter of the year, “the appraised value of new housing units in the country averaged to P83,759 per square meter (sqm), registering 6.8 percent and 1.8 percent growth rates over the comparable year-ago and quarter-ago levels, respectively. Similarly, the average appraised value per sqm in the NCR increased by 9.6 percent YoY and 5.6 percent quarter-on-quarter to P140,158 per sqm.” 

In AONCR, the average appraised value per sqm expanded by 7.8 percent, YoY, but declined by four percent on a quarterly basis to P58,741. It may be noted that the average appraised value of properties in the NCR is more than twice than that in the AONCR.

The RREPI is a measure of the average change in the prices of various types of housing units based on banks’ data on actual mortgage loans granted to acquire new housing units (excluding pre-owned or foreclosed properties).