The dynamic Phl real estate industry

The dynamic Phl real estate industry | Daily Tribune

The country’s real estate industry is as dynamic as it could be, with both unique challenges and opportunities seen.

Filipinos over the last 25 years have shown strong interest in buying residential properties due to the country’s population growth and urbanization, with the latter fueled by people moving to cities to look for jobs, pursue education, or just get a fresh start in life.

Homeownership

The process of owning a home has been made simple with government introducing different loan programs. An example is Pag-IBIG Fund’s housing loans with low interest rates and flexible payment terms. Government subsidies, which cover a portion of the downpayment, are also available for first-time home buyers.

Launched in September 2022, 4PH (Pambansang Pabahay Para sa Pilipino) aims to address the country’s housing backlog.

With the Department of Human Settlements and Urban Development at its helm, 4PH is seen to benefit around 30 million Filipinos through the construction of 6.15 million housing units within six years.

The program, focusing on multi-sector collaboration, involves the participation of national government agencies, local government units (LGUs) and private sector partners.

Since its launch, 4PH has completed several housing projects across the country, with many more currently under construction, some of which are in Western Visayas, Bicol, Davao Region and Cordillera Administrative.

Immersive experience

Gone are the days of traditional home tours and physical property interactions as the digital age of real estate is upon us.

Proptech, a contraction of property and technology, aims to optimize how people buy, sell, manage, research, analyze and market property assets.

Because of Covid-19, businesses and consumers adopted the online space, with showrooms transitioning into online 3D models. Open house events have turned into webinars and video tours.

There’s also the use of the third wave of Internet technologies, such as decentralization, artificial intelligence, machine learning and blockchain technologies.

In real estate, property and facilities management is one area primed for an AI-driven revolution, where its potential to simplify operations and boost efficiency is vast, especially with major principles: conserving resources, reducing wasted time and lowering the cost of operations.

“AI-driven technologies like virtual assistants, chatbots and automated customer service interfaces have replaced human roles due to their improved efficiency, service quality and cost-effectiveness,” Claro dG. Cordero, Jr., director and head of research, consulting and advisory services at Cushman & Wakefield, said.

Going green

A growing trend in the real estate Philippines industry is environmental sustainability.

Developers have become conscious of incorporating eco-friendly practices in their properties such as solar panels, rainwater harvesting systems, double-paned windows and smart thermostats.

The quality of air in the community is also directly impacted by the volume of vehicles. With more residents buying EV or hybrid vehicles, some properties have installed EV charging stations that help lessen the carbon footprint. EVs directly lower carbon dioxide and other greenhouse gas emissions from gasoline-powered vehicles.

Unprecedented challenges, room for growth

The Philippine real estate market, however, is experiencing unique challenges.

In a report by real estate service firm Cushman & Wakefield, inflation and prolonged high interest rates remain significant concerns, with food and crude oil prices heavily impacting the economy. Recent global political trends also complicate the situation.

Cushman & Wakefield observed a decline in average Prime & Grade A office developments in Metro Manila for the fifth consecutive quarter.

Non-traditional and alternative sectors such as technology, healthcare and logistics are expected to drive the new wave of demand in real estate, amplified by significant growth during and even after the Covid-19 pandemic.

Property consultancy Colliers earlier estimated that, given the current condominium oversupply, it will take about 8.2 years for the unsold units to be sold. The pre-selling market in the upscale and luxury segments, however, is seeing a different light with high-end properties in prime locations like the business districts of Makati, Bonifacio Global City and Ortigas surviving.

A new policy allowing foreign investors to lease land for up to 99 years for tourism-related projects is expected to attract global hotel brands, the most recent of which are Mercure, Banyan Tree and Hilton Garden Inn.

The Philippine property market exhibited sustained, if cautious, resilience in Q1 2025. Hopefully it will continue to do so in the months to come.