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Tuesday, August 29, 2017

Philippine House Prices Hit New Peak While Sales Volumes Drop Sharply in the 1st Semester of 2017

In the first half of 2017, the Philippine House Price Index hit a new peak of 232.41. This is 3.09% higher than the previous peak of 225.44 posted in the first quarter of 2017 and 8.05% on a year-on-year basis. From 2004 to the present, the Philippine House Price Index has climbed much faster than inflation. The gap between current house prices and house prices adjusted for inflation stands at its highest ever, 66.52%.  Meaning, had house prices merely tracked inflation since 2004, the Philippine House Price Index would now stand at just 165.89 as of the first half of 2017.

Source: Collier's International Philippines, Makati CBD Prices

Sales volumes, as indicated by the HLURB Licenses to Sell Statistics, have shown a dramatic slowdown in the first half of 2017. Annualized Sales Volumes now stand at 171,172 units for the first half of 2017. This is off by 34.20% since year-end 2016.  This sales volume now stands at slightly higher than the 170,379 level posted at year-end 2011 and below the 172,967 level posted almost ten years ago at year-end 2007.  If sales volumes do not pick up in the second half of 2017, the long-term upward trend in ever increasing sales volumes that has been in place since 2001 would have been broken, indicating a real estate bear market is imminent.

Source: HLURB Licenses to Sell

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