Residential property prices in Metro Cebu experienced the most significant quarterly drop among the Philippines' major urban centers in the third quarter of 2025. This highlights a broader cooling trend in the housing sector, even as banks reported a continued expansion in lending for home purchases, according to official data from the Bangko Sentral ng Pilipinas (BSP).
National Market Cools as Quarterly Prices Contract
The latest Residential Property Price Index (RPPI) reveals a marked slowdown in the national housing market. On a yearly basis, residential property prices across the country increased by 1.9 percent in the third quarter of 2025. This growth is significantly slower than the 7.5 percent year-on-year rise recorded in the preceding quarter.
More strikingly, prices fell by 3.8 percent from the second to the third quarter of 2025. This marks the most severe quarterly contraction since the central bank introduced the index in 2019.
Metro Cebu Leads Quarterly Decline Amid Annual Growth
The data shows a clear divergence between annual and quarterly performance, particularly in key regional markets. Metro Cebu remained one of the country's faster-growing markets on an annual basis, with prices up 3.8 percent year-on-year. This trailed only the 5.5 percent gain seen in Metro Mindanao.
However, the short-term momentum tells a different story. On a quarterly basis, Metro Cebu recorded an eight percent decline in residential property prices. This was the largest drop among all major regions and represents the steepest quarterly fall for Metro Cebu since 2019.
Price pressures eased markedly outside the National Capital Region (NCR). In Areas Outside NCR (AONCR), year-on-year price growth decelerated sharply to just 1.6 percent from double-digit gains in Q2. Quarter-on-quarter, prices in AONCR dropped by 5.9 percent.
In contrast, the NCR provided some support to the national average, with residential values still up 2.3 percent year-on-year, though they edged down 0.8 percent from the previous quarter.
Housing Types and Price Corrections
The cooling trend affected different property types unevenly nationwide:
- House Prices: Increased 1.9% year-on-year but fell 5.7% quarter-on-quarter—the biggest quarterly decline for houses since 2019.
- Condominium Prices: Showed a modest annual rebound of 1.4%, though they still slipped 1.4% from the previous quarter.
In Metro Cebu and other regions outside NCR, houses saw the steepest quarterly price corrections, while condominium prices declined more moderately.
Robust Loan Demand Defies Falling Prices
Despite the softening prices, demand indicators in the housing market remained firm. The number of residential real estate loans approved by banks surged by 24.6 percent year-on-year in the third quarter. This was supported by improved consumer sentiment and a more positive outlook from banks on housing credit.
Loan growth was strongest outside NCR, where approvals climbed 31.7 percent. Within this group, the Balance Greater Manila Area led with a 47.8 percent increase, followed by Metro Cebu with an 11 percent rise. On a quarterly basis, loan availments in Metro Cebu grew by two percent.
Condominium loans expanded the fastest nationwide, with approvals skyrocketing 50.8 percent year-on-year, driven largely by a sharp increase outside NCR. Loans for houses rose a more modest nine percent, with growth concentrated outside Metro Manila.
Market Consolidation and Outlook
The median price of residential properties nationwide stood at P3.46 million in the third quarter. NCR houses remained the most expensive segment, with a median price exceeding P7.3 million, while houses in other provincial areas were priced below P2.7 million.
Economists interpret the data as signaling a market entering a period of consolidation. The softer prices are helping sustain loan demand, particularly in key urban centers like Metro Cebu. However, developers and lenders are expected to turn more cautious as the market heads into 2026.
Analysts note that the sharper pullback in prices outside Manila suggests buyers are becoming more price-sensitive after years of strong gains. Developers in secondary cities are concurrently adjusting their pricing strategies in response to softer demand conditions.
