Colliers Philippines said residential property prices may rise in the fourth quarter after falling a quarter earlier.
“As we have seen before, the fourth quarter is traditionally a strong quarter for residential acquisitions, whether within or outside Metro Manila, whether it is condominiums or horizontals,” said Joey Roi H. Bondoc, director and research head of Colliers Philippines. businessworld By telephone.
The Bangko Sentral ng Pilipinas (BSP) residential property price index indicated that housing prices nationwide recorded the weakest growth ever in the third quarter at 1.9%.
This was a sharp slowdown from the 7.5% growth recorded in the three months to June and 7.6% a year earlier.
BSP also reported that lower real estate investment reduced the real estate exposure of banks and trust institutions to 19.54% at the end of September from 19.61% at the end of June and 19.55% a year ago.
Real estate loans rose 8.9% to P3.096 trillion at the end of September, but real estate investment fell 5.75% to P354.749 billion.
Mr Bondoc said year-end bonuses and the inflow of remittances from overseas Filipino workers could boost demand for residential property in the fourth quarter.
He also said the peso's recent weakness could prompt expatriates, especially those from North America, to send more money home.
The peso has been trading between P58 and P59 against the dollar since October, reaching a new record low of P59.22 on December 9.
However, Mr Bondoc said increased mortgage rates could still dampen house price growth in the near term, but any potential rate cuts could help property growth and price growth by this quarter next year.
“I think we need to keep an eye on a possible reduction in mortgage rates, given that the central bank has dropped key policy rates significantly,” he said. “And if that happens, that will provide a better incentive for residential demand to grow, and therefore residential prices, (will) start to rise.” fi“First quarter of 2026.”
The BSP ended the year with a fifth consecutive 25 basis-point (bp) cut on December 11, bringing the total cut on prime borrowing costs to 200 bps since August 2024. The benchmark policy rate is currently at a three-year low of 4.5%.
Mr Bondoc said reducing mortgage rates from the current 7.8% to between 6% and 6.5% could help the property industry by boosting confidence among buyers.
“But the concern is that they're not lowering their mortgage rates,” he said. “If they start doing that next year, 2026, I think (it) will be a very good sign that demand and then prices can recover quickly because of this low mortgage rates.” , Katherine K. chan