A new house being built in the Philippines. Housing values slid 1.3 per cent in the provinces, according to Bangko Sentral ng Pilipinas. Image Credit: Facebook

Manila: Philippine home prices declined in the third quarter from the prior three months, reversing a short-lived rebound as interest rates increased.

Housing values fell 0.6 per cent quarter-on-quarter, according to Bangko Sentral ng Pilipinas. Prices rose 0.8 per cent gain in the second quarter following a 0.9 per cent decline in the first three months of the year.

The central bank raised rates as inflation accelerated to defend the peso, which was the worst performer among Asia’s most actively-traded currencies in the first half after the Indian rupee. In the past six months, the peso emerged as the region’s top performer.

The benchmark interest rate was pushed 175 basis points higher since May before taking a pause this month.

Price decline

The price declines were more profound outside the capital area.

Housing values slid 1.3 per cent in the provinces, compared with a 0.2 per cent drop in the greater Manila area, the central bank said, citing data based on housing loans granted by banks.

On a year-on-year basis, third-quarter home prices climbed 4.4 per cent, slowing from a 4.8 per cent increase in the previous three months, the central bank said.

Seven in 10 residential real estate loans were for the acquisition of new homes, of which more than half were condominium units. Metro Manila accounted for 57.4 per cent of mortgages granted by banks in the third quarter.

Separately, the central bank said outstanding loans granted by foreign currency deposit units of banks stood at $16.1 billion at the end of September, up $419 million from end-June’s $15.7 billion and $1.1 billion higher than a year ago as disbursements exceeded principal repayments. The maturity mix of the loans remained biased toward medium- to long-term debt, payable over more than a year, accounting for about 77 per cent of the total.