Philippine home price growth hit a seven-year low in the final quarter of 2025, primarily driven by a record-low peso and a regional energy crisis. The Residential Property Price Index (RPPI) increased by 1.6% year-on-year in the three months ending December 2025, a slowdown from 1.9% in the prior quarter and marking the slowest appreciation since Q1 2019. This national deceleration was largely influenced by a significant price drop in regions outside the National Capital Region (NCR).
The slowdown was most pronounced outside the NCR, where price growth eased to 1.0%, the lowest on record for that segment. In contrast, prices within the NCR remained relatively stable with a 2.3% annual increase. This created a two-tier property market, with capital urban centers showing resilience due to sustained demand, especially for high-density condominium units. Traditional single-family homes and provincial properties faced mounting pressure, contributing to the overall deceleration.
The divergence was also reflected in bank lending for real estate, which expanded vigorously within the capital but shrank across most outer provinces. Condominium prices continued to climb, rising by 3.5% in Q4 2025 from 1.4% in Q3, as urban buyers favored high-density developments. However, house prices, including single-attached, detached, and townhomes, saw minimal growth, increasing by only 0.1%, the smallest gain in nearly seven years.
Central bank officials face a delicate challenge: to stabilize regional housing demand without overstimulating the resilient capital city market. Higher interest rates and the expectation of additional hikes in 2026 are impacting borrowing capacity, while wage growth has not kept pace with earlier property price surges. For serious buyers, this period offers more leverage, as prices in many house-and-lot projects appear almost flat on an inflation-adjusted basis.
The Bangko Sentral ng Pilipinas (BSP) monitors the RPPI as a gauge of credit market conditions and financial stability. The BSP held its benchmark interest rate at 4.25% at the time, citing persistent supply-side inflation risks linked to Middle East tensions. The moderation in residential real estate loans (RRELs) granted, which slowed to 4.1% year-on-year in Q4 2025, reflects weaker sentiment among both consumers and lenders, with fewer households viewing the quarter favorably for home purchases.
