Affordable housing, regional projects drive Phl residential market growth

Philippine real estate developers are scaling back new project launches and recalibrating sales strategies as Metro Manila’s unsold condominium supply climbs to roughly 82,900 units, according to industry research reports released recently.

Data from Leechiu Property Consultants showed steady underlying housing demand during the first half of 2026, though developers have shifted focus toward inventory management and capital preservation to improve sales performance amid persistent economic pressures.

The current Metro Manila unsold inventory represents approximately 34 months of supply, prompting major property firms to adopt a measured approach to new developments.

Colliers Philippines director of Research Joey Roi Bondoc cited in the firm's second-quarter 2026 report that the slowdown in residential and office launches marks a necessary strategic pivot, allowing the market time to absorb existing stock before introducing new supply.

Subdued economic growth, inflation, and elevated interest rates have eroded buyer purchasing power, widening the gap between home prices and median household incomes. Combined pre-sales among the country's major developers — Ayala Land Inc., SM Prime Holdings Inc., Robinsons Land Corp., and Megaworld Corp. — fell 7 percent year-over-year in the first half of 2026.

Despite broader market headwinds, lower-cost housing units continue to record solid demand.

Colliers data revealed that condominiums priced between P1.8 million and P3.6 million accounted for nearly two-thirds of total Metro Manila condominium take-up during the first six months of the year.

State financing programs and policy measures are also helping sustain homebuyer participation.

The Pag-IBIG Fund recently raised its maximum housing loan ceiling to P10 million, giving qualified members access to higher-value financing, while the national government continues its Pambansang Pabahay para sa Pilipino socialized housing initiative.

Outside the capital, real estate firms are expanding horizontal house-and-lot projects into regional growth centers across Central Luzon, Southern Luzon, the Visayas, and Mindanao to diversify risk and tap emerging demand.

Market analysts caution, however, that a full industry recovery will take time. S&P Global Ratings corporate analyst Johann Tan warned that a significant rebound in the Philippine residential sector may not occur until late 2027 as high construction costs, elevated interest rates, and excess inventory continue to weigh on market activity.