Brunei's house price index slips in Q2 after a Q1 jump as financed purchases recover

Implications for lenders

For mortgage lenders in Brunei, a -3.0% quarterly move on a thin sample suggests valuing collateral over several quarters rather than on the latest print. With small businesses at 49.5 and finance and insurance at 49.9, SME underwriting may continue to rely on firm-level cash flow rather than the headline sentiment reading.

Implications

Facts

Brunei Darussalam Central Bank (BDCB) said on 9 October 2026 that its Residential Property Price Index stood at 96.2 in the second quarter, down 3.0% from 99.2 in Q1 2026 and 0.3% below Q2 2025. ¹ The quarterly change was -3.0% (after +6.4% in Q1 2026) and the annual change -0.3% (after +13.0% in Q1 2026). ² The median purchase price across all private residential property types was BND 255,000, down 1.5% from Q1 2026, up 0.2% from Q2 2025. ³

The index is compiled from mortgage data obtained from banks. Transactions in that data rose to 120, up 36.4% from 88 in Q1 2026; down 17.8% from Q2 2025. ⁴ Detached houses made up 64.2% of transactions, up from 59.1% in Q1 2026, and BDCB reported no financing for land purchases.

On 20 October BDCB published its Business Sentiment Index for August 2026. The current business conditions index was 78.1, and BDCB said businesses were generally more optimistic than in July. ⁵ BDCB has revised the method, widening the band of readings treated as no change on the previous month. The one-month-ahead index was 56.5. ⁶ Finance and insurance registered 49.9, small businesses 49.5 (against 78.5 for large businesses), and current employment 46.6. ⁷ The release gives no prior-month values; BDCB says historical data have been recalculated under the revised method.

Analysis

BDCB's quarterly data since Q2 2025 show how volatile the index is. It fell to 88.7 in Q3 2025 (down 8.1% from Q2 2025), rebounded to 99.2 in Q1 2026 (up 6.4% from Q4 2025 and 13.0% from Q1 2025) and slipped back in Q2. Transaction counts moved the other way in several quarters: from 187 in Q3 2025 down to the Q1 2026 low, then up again in Q2. With so few financed sales each quarter, a shift in the mix of detached houses and apartments can move the index by several points.

The business survey is also choppy. Current conditions were 46.3 in June 2026, in the no-change band, before the August reading of 78.1. ⁸ The August strength was concentrated in oil and gas related firms and large businesses, which fits AMRO's view that Brunei's 2026 growth of 1.9% rests on an energy windfall. Banks' asset quality was steady going into the period, with an NPL ratio of 1.6% in Q1 2026 per AMRO.

Counterpoints and uncertainties

The price index rests on a small number of bank-financed transactions each quarter, so one quarter's fall may reverse. The index covers financed purchases only, not cash buyers. The business survey's method was revised and the August release gives no prior-month comparison, so the July-to-August change cannot be measured from the release itself. Strength concentrated in oil and gas related firms could fade with energy prices.