Philippine residential property values saw a 7.5% increase year-over-year in the second quarter of 2025, according to the Bangko Sentral ng Pilipinas (BSP). This growth, though significant, was slightly less than the 7.6% rise recorded in the first quarter, revealing a nuanced shift in the housing market’s momentum.
The Tale of Two Regions: NCR vs. AONCR
Let’s break down what’s happening in the Philippine real estate scene. It’s really a story of two different regions: the National Capital Region (NCR), which includes Metro Manila, and Areas Outside the National Capital Region (AONCR). Think of AONCR as everything else in the Philippines, from bustling cities like Cebu and Davao to smaller towns and rural areas.
AONCR is where the real action was in Q2 2025. Housing prices there skyrocketed, jumping by a whopping 11.5% compared to the same period last year. To give you some context, that’s more than triple the 3.0% growth they saw in the first quarter of the year. So, what’s driving this surge outside of Manila?
Well, several factors could be at play. It’s likely that increased infrastructure development in these areas is making them more attractive. Think better roads, airports, and internet connectivity. This could be drawing in businesses and individuals looking for more affordable living options with access to modern conveniences. Plus, many Filipinos are choosing to move away from the hustle and bustle of Metro Manila for a more relaxed lifestyle, especially with the rise of remote work.
Now, let’s switch gears and look at NCR, the heart of Metro Manila. Here, the story is quite different. Price growth slowed down considerably, going from a scorching 13.9% in the first quarter to just 2.4% in the second. That’s a pretty significant deceleration, suggesting a cooling off of the market in the capital region. Why the slowdown?
Several reasons could explain this. Affordability is a major concern in Metro Manila. Property prices have been steadily climbing for years, making it harder for the average Filipino to afford a home. Also, there might be a shift in preferences, with more people looking for larger living spaces outside the city center, especially after the pandemic highlighted the importance of having more room to move around. Another potential factor is the increased supply of condominium units in NCR. With more options available, prices might be leveling off as the market finds its equilibrium.
Digging Deeper: Quarter-on-Quarter Growth
Beyond the year-on-year figures, let’s examine the quarter-on-quarter growth. This gives us a more recent snapshot of the market’s momentum. Nationwide, the index rose by 4.2% from the first to the second quarter of 2025, which is faster than the 2.6% gain seen in the first quarter. This indicates that the market is still moving forward, even if there are regional differences.
Again, AONCR led the way, with prices increasing by a substantial 10.5% from the previous quarter. On the other hand, NCR prices actually declined by 3.6% during the same period. This reinforces the trend we saw in the year-on-year figures: AONCR is experiencing robust growth, while NCR is showing signs of cooling down.
Regional Hotspots: Balance GMA, Metro Cebu, and Beyond
Let’s zoom in even further and look at specific areas within AONCR. The Balance Greater Manila Area (GMA), which includes provinces surrounding Metro Manila like Cavite, Laguna, Rizal, and Bulacan, posted the highest annual growth, at an impressive 13.2%. This makes sense, as these areas offer a more affordable alternative to living in Metro Manila while still providing relatively easy access to the city for work or other purposes.
Metro Cebu also performed strongly, with an 11.5% increase in housing prices. Cebu is a major economic hub in the Visayas region, attracting businesses and individuals alike. The growth in Metro Cebu reflects its continued importance as a center for commerce and tourism.
Other Areas in the Philippines, which includes a diverse range of provinces across the country, saw an 8.8% rise in housing prices. Even Metro Mindanao, in the southern part of the Philippines, experienced a solid 7.7% increase. This demonstrates that the growth is not limited to just a few specific areas, but is spread across various regions of the country.
When we look at the quarterly growth, Balance GMA again led the pack with an 11.7% increase. Metro Cebu was close behind at 12.2%, with Other Areas in the Philippines coming in at 10.2%. These figures confirm that these regions are the driving forces behind the overall growth in the AONCR market.
Houses vs. Condos: A Tale of Two Property Types
Now, let’s dive into the different types of residential properties and see how they’re performing. Overall, house prices rose by 13.1% year-on-year nationwide. This positive trend was somewhat offset by a slight 0.2% decline in condominium prices.
Looking at the quarter-on-quarter figures, house prices jumped by a significant 10.3%, while condo prices dipped by 2.8%. This suggests that buyer preferences might be shifting towards houses, potentially due to the desire for more space and privacy.
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In the NCR, house prices actually surged by 14.3% year-on-year. However, this was dragged down by a 2.2% drop in condo prices, reversing the double-digit growth seen in the first quarter. The quarterly decline in NCR was largely due to a 5.4% fall in condo prices, which overshadowed the 1.9% rise in house values. This clearly shows that the condo market in Metro Manila is facing some challenges.
Outside the capital, AONCR saw robust annual growth in both houses and condos, which rose by 12.6% and 6.2%, respectively. Quarterly price increases in AONCR reached 12.3% for houses and 4.0% for condo units, demonstrating broad-based demand across different property types.
Understanding the Trends: Houses Gaining Popularity
The data suggests that houses are becoming increasingly popular, particularly in AONCR. There could be several reasons for this. As mentioned earlier, the pandemic may have led to a shift in preferences, with people prioritizing larger living spaces and outdoor areas that are more commonly found in houses. Additionally, the increased affordability of land outside of Metro Manila makes it easier to build or purchase a house.
The condo market, on the other hand, might be facing headwinds due to oversupply in certain areas, particularly in Metro Manila. The increased availability of condo units could be putting downward pressure on prices. However, it’s important to note that condos still offer many advantages, such as convenient locations, amenities, and relatively lower maintenance costs, especially for the younger professionals.
The Loan Landscape: More Filipinos Buying Homes
Now, let’s examine the lending side of the real estate market. The number of residential real estate loans (RRELs) granted nationwide rose by 14.7% year-on-year in the second quarter. This is a significant turnaround, as it breaks a year-long streak of decline.
According to the BSP report, “This uptick aligns with the results of the Q2 2025 Consumer Expectations Survey (CES), which showed a less pessimistic outlook among consumers regarding the purchase of a house and lot.” In other words, more Filipinos are feeling confident about buying a home.
A larger share of households—25.3%—considered the second quarter a favorable time to buy residential property, up from 21.6% in the previous quarter. This suggests that consumer sentiment is improving, which is a positive sign for the real estate market.
The increase in RRELs was led by AONCR with 16.6% growth, followed by NCR at 10.3%. This again highlights the strength of the AONCR market. Within AONCR, Balance GMA registered a 22.5% increase in housing loan availments, followed
by Metro Cebu (18.7%), Metro Mindanao (12.9%), and Other Areas in the Philippines (4.3%).
Quarter-on-quarter, total housing loan availments rose by 5.4%, with both NCR and AONCR contributing positively at 9.7% and 3.8%, respectively. This shows that the lending market is gaining momentum across the country.
Condo vs House Loans: What’s Trending?
Interestingly, loans for condominium units surged by 39.8% year-on-year nationwide
