Property sector seen slowing in 2nd half amid oil, price pressures

The Philippine property sector is expected to slow in the second half as the Iran war, elevated oil prices and persistent inflation raise costs and weaken demand, prompting developers to delay projects and adopt a more cautious approach.

Analysts said higher fuel and construction costs, elevated borrowing rates and weaker consumer purchasing power are likely to weigh on residential, retail and hospitality segments through the rest of 2026, although industrial and outsourcing-related property demand might provide some support.

Joey Roi Bondoc, director for research at Colliers Philippines, said the impact of the war on fuel and supply chains could continue to pressure developers and buyers.

Developers have started delaying construction and marketing some projects in anticipation of weaker demand, he said.

“The Middle East covered about 18% of total remittances to the Philippines in 2025, so that is pretty significant,” he added.

Claro dG. Cordero, Jr., director for research at Cushman & Wakefield Philippines, said prolonged war in the Middle East would continue to affect oil markets even if tensions ease.

“Even if de-escalation occurs, oil production and trade through the Strait of Hormuz will take time to normalize,” he said in an e-mailed reply to questions.

He said higher oil prices would eventually filter through to transportation, utilities and consumer expenses, squeezing household purchasing power in a country heavily dependent on imports.

Cushman & Wakefield also said inflation risks could spur the Bangko Sentral ng Pilipinas (BSP) to keep benchmark interest rates elevated.

Mr. Bondoc said the BSP’s cumulative 200-basis-point policy easing has yet to translate into substantially lower mortgage rates.

“Until we see a significant reduction in mortgage rate, I think we won’t see a substantial spike in condominium take-up in the Metro Manila pre-selling market,” he said, noting that five-year mortgage rates remain at about 7.7% to 7.8%.

The condominium segment in Metro Manila continues to face a large supply overhang, with about seven years’ worth of unsold inventory, according to Colliers.

As a result, developers are increasingly shifting toward horizontal housing projects in provincial growth areas such as Cavite, Laguna and Batangas, where demand is driven more by end-users than speculative buyers.

“It doesn’t make economic sense at this point to start building more vertical projects in Metro Manila,” Mr. Bondoc said.

Colliers added that provincial house-and-lot projects continue to post strong average take-up rates of about 90%, partly because overseas Filipino workers are less likely to stop paying for homes occupied by their families.

Despite the challenges, analysts said some property segments are expected to continue performing well.

Mr. Cordero said logistics and industrial developments, information technology and business process management (IT-BPM) office spaces and the high-end residential market are likely to outperform.

“Logistics and industrial benefit directly from supply chain restructuring, as occupiers seek larger, strategically located warehousing near major transport nodes to guard against disruption,” he said.

He added that tighter budgets among global companies could still support Philippine outsourcing demand because firms continue to seek lower-cost operating locations.

John Corpus, executive director for tenant representation at Savills Philippines, said a weaker peso could further improve the country’s competitiveness for export-oriented industries and outsourcing firms.

However, he noted that many business process outsourcing firms and global capability centers remain cautious about expansion because of economic uncertainty and rapid technological change.

“As a result, occupiers are expected to remain selective and strategic in their expansion decisions,” Mr. Corpus said.

Savills also cited geopolitical risks involving Taiwan and domestic political uncertainty ahead of the 2028 election cycle as factors that could affect investor sentiment.

“Investors generally prefer stability, policy continuity, and a strong focus on economic priorities,” Mr. Corpus said.

Analysts said developers should prioritize operational efficiency and carefully phase projects instead of pursuing aggressive expansion.

They also recommended locking in material costs early and investing in energy-efficient infrastructure and renewable energy systems to reduce operating costs for tenants.

Source: Business World

Residential Price Softening vs OFW Demand: How to Position Your Portfolio in 2026

The Philippine residential market is entering 2026 with a clear but conflicting story: home prices are softening in many segments, yet demand—especially from OFWs—remains stubbornly resilient. For property investors and buyers, this tension creates both risk and opportunity. Positioning your portfolio right now means understanding where the market is losing steam, where cash‑flowing demand still runs hot, and how to time your buys, holds, and exits.

Why residential prices are softening in 2026

Several forces are pushing Philippine residential prices toward a cooler, more selective phase.

• Slower pre‑selling activity: Many developers have reported weaker take‑up rates on new projects, especially in the mid‑ and high‑end condo segments. This reduces pricing power and forces more aggressive payment terms and discounts.

• Financing pressure: Higher‑than‑expected funding costs and tighter lending standards have made some buyers pause or downsize, which in turn weakens the emotional “fear of missing out” that used to drive quick buys.

• Excess supply in certain submarkets: Some business districts and satellite CBDs have absorbed more supply than the leasing market can absorb, which indirectly weighs on nearby residential pricing.

The result is a fragmented market: discounting and longer sales cycles in some areas, while others still see steady demand for the right product and location.

Why OFW demand still supports the market

At the same time, OFW remittances remain a powerful undercurrent.

• Stable cash inflows: Monthly remittance flows continue to grow at a modest but steady pace, giving overseas Filipinos real purchasing power for homes, condos, and rental properties back home.

• Emotional and family‑driven buying: Many OFWs buy property not just as an investment but as a place for parents, children, or a future “homecoming.” This kind of buyer tends to be less sensitive to short‑term price swings and more focused on long‑term value and security.

• Preference for familiar locations: Metro Manila, select provincial capitals, and established BPO hubs remain top choices, which keeps base demand in these corridors even if speculative interest cools.

In short, the residential market is no longer being driven only by local entry‑level buyers and speculative investors; a large chunk of the support now comes from OFWs spreading capital across multiple cities.

How to position your property portfolio in 2026

Given softer pricing but still‑solid OFW demand, the smart move in 2026 is not to panic but to be more selective and tactical.

1. Shift from “quick flips” to income‑oriented assets

Flipping condos on hype alone is becoming riskier. Instead, focus on:

• Cash‑flowing units in high‑occupancy areas (near BPO hubs, universities, and transport nodes).

• Rental‑friendly sizes: 20–30 sqm studios or 1‑bed units in areas with strong single‑tenant demand (OFWs leaving family, local professionals, or students).

• Net‑yield focus: Aim for properties where gross yield after commissions and maintenance still lands in the 5–7% range, especially if you can lock in long‑term OFW tenants.

This style of portfolio works better in a softer market because returns are driven by rent, not by constant price appreciation.

2. Prioritize locations with strong OFW connectivity

Not all cities are equal. In 2026, prioritize:

• Metro Manila: Entry‑level condos near transport (MRT/LRT, expressways) and major job areas.

• Key provincial hubs: Places with strong BPO presence, universities, and airports (e.g., Cebu, Iloilo, Davao, Bacolod, and emerging BPO satellites).

• “homecoming” cities: Provinces with heavy OFW populations (e.g., parts of Bicol, Ilocos, Eastern Visayas) where OFWs return to buy homes or build rental houses.

Here, OFW demand becomes a buffer when prices cool, because overseas buyers chase perceived safety and family‑centric locations.

3. Use softening prices as a buying window

Price softening is not inherently bad if you’re a strategic investor.

• Target delayed‑project or pre‑selling units with better payment terms: developers may offer longer payment plans, lower down payments, or incentives like free parking or appliances.

• Avoid overcrowded micro‑markets: If dozens of similar projects are launching in the same few blocks, future resale and rental competition will be harsher.

• Hold quality over glamour: A well‑located, older building with good maintenance and steady tenants can outperform a flashy new tower in a weak location.

In 2026, the investors who win are those who treat price dips as a chance to add carefully selected, income‑generating units rather than chasing speculative price spikes.

4. Adjust expectations for exits and timing

In a softer market, exits take longer and may require more patience.

• Plan for 5–7 year holds on many residential units, especially if OFW‑driven cash flow is part of the thesis.

• Be ready to negotiate: Sellers who need liquidity may be willing to accept lower prices, but you must also be ready to accept slightly longer holding periods.

• Consider phased exits: Instead of selling everything at once, stagger exits over time as OFW demand, interest rates, and infrastructure developments shift.

The key is replacing “buy now, sell fast” expectations with a more disciplined, income‑weighted approach.

5. Use OFWs as both buyers and tenants

Most OFWs are not just end‑users—they are also long‑term tenants or landlords.

• Buy units that OFWs can rent out: Properties near schools, hospitals, or family homes can be leased to relatives or local professionals.

• Offer OFW‑friendly terms: Longer lease guarantees, flexible payment dates aligned with remittance cycles, and minimal maintenance friction can justify slightly lower rents.

• Build a small “OFW‑tenant” portfolio: A handful of such units can create a stable, dollar‑linked income stream when paired with remittance‑backed families.

Thinking in terms of OFW usage patterns—not just OFW buying—helps you pick the right product type and location.

What conservative vs aggressive investors should do

• Conservative investors: Focus on fully completed, cash‑flowing units in established locations. Accept slower appreciation but stronger downside protection from OFW support and rental demand.

• Aggressive investors: Target select pre‑selling or delayed projects in emerging infrastructure corridors, but only where OFW demand or strong BPO/IT‑BPM presence underpins long‑term demand. Limit leverage and avoid over‑committing to multiple units.

Both approaches can coexist in one portfolio: core metro and provincial cash‑flow plays sitting alongside a few higher‑risk, higher‑growth bets in up‑and‑coming areas.

Final positioning tip for 2026

In 2026, the Philippine residential market is not collapsing—it is rebalancing. Price softening is a natural correction after years of aggressive growth, but OFW demand, family buying, and steady rental needs keep the fundamentals alive in many pockets.

If you position your portfolio around locations with strong OFW connectivity, cash‑flowing units, and long‑term holding horizons, you can turn today’s softer pricing from a risk into a tactical advantage. The goal is no longer to chase the last 10% of appreciation; it’s to build a stable, OFW‑anchored real estate portfolio that endures whatever the next few years bring.

Source: Ziggurat Real Estate

US: It’s Called a Buyer’s Market, But Most Buyers Still Can’t Afford It

On paper, many economists now describe the housing landscape as a “buyer’s market.” Inventory has improved from pandemic lows, sellers are more willing to negotiate, and list prices in some metros have stopped climbing in double digits. Yet for millions of households, especially first-time buyers, the numbers still don’t work—and the so‑called buyer’s market feels more like a locked door than an open house.

When the Data Says “Buyer’s Market” but Your Budget Says “No”

The classic definition of a buyer’s market is simple: more homes for sale than serious buyers, which should put downward pressure on prices and give purchasers the upper hand in negotiations. In reality, prices remain far above pre‑pandemic levels, and higher mortgage rates mean that even small houses generate big monthly payments. Studies show the income needed to afford a “typical” home has jumped by about 50 percent in just five years, while wages have lagged far behind. For many households, that gap easily reaches tens of thousands of dollars of additional annual income—money that simply doesn’t exist in their paycheck.

This is why surveys now find that well over half of Americans say buying a home in 2026 is unrealistic, even though headlines suggest conditions should be improving for buyers.

How We Got Here: Prices Up, Rates Up, Expectations Up

Three forces collided to create this paradox. First, a surge in home prices during and after the pandemic permanently reset the baseline; in many states, median prices are up 40–50 percent versus early 2020. Second, the jump in mortgage rates from the 3 percent range to closer to 6–7 percent multiplied the monthly cost of borrowing the same principal. Third, investors—ranging from small-scale landlords to large institutions—captured a rising share of purchases in recent years, particularly in starter-home segments.

Together, those factors transformed what might have been a textbook buyer’s market into something more stratified: well-capitalized buyers and high-income households can finally negotiate; everyone else is still shut out.

Why First-Time Buyers Feel the Squeeze the Most

First-time buyers face almost every disadvantage at once. They need to assemble a down payment from scratch, often while juggling rent, student loans, and higher everyday costs. Many lack the home equity that repeat buyers can roll into their next purchase, and they have less flexibility when bidding against cash-rich investors or move-up buyers. Surveys also show that younger buyers are more sensitive to financial shocks—job changes, health expenses, or childcare costs—which makes them wary of stretching for a mortgage, even if they technically qualify on paper.

Emotionally, this creates a disconnect: social media is full of key‑handover photos and renovation videos, but behind the scenes, a large share of would‑be buyers have quietly decided to stay put or delay owning for years.

Practical Moves When the “Buyer’s Market” Isn’t Yours

If you’re stuck in this paradox—hearing it’s a buyer’s market while feeling priced out—there are still strategic steps you can take:

• Redefine the target, not the dream. Consider smaller homes, older stock, or less “Instagrammable” locations that still fit your core needs like commute, schools, or safety.

• Broaden the search radius. Many of the most brutal affordability jumps are concentrated in trendy metros; expanding to adjacent counties or emerging suburbs can drastically change the math.

• Work backward from the monthly payment. Decide what you can safely afford each month after padding for maintenance, taxes, and insurance, then let that number dictate your price range, not the other way around.

• Use time to your advantage. If buying in 2026 remains unrealistic, treat this year as a “prep year”: focus on debt reduction, credit repair, and saving, so that if rates or prices break your way later, you’re ready to move quickly.

The Real Buyer’s Market Is Still Ahead

The uncomfortable truth is that the current buyer’s market mostly belongs to those who already hold wealth—high earners, repeat owners, and investors with dry powder. For everyone else, the real buyer’s market will only arrive when incomes catch up, or when a combination of softer prices and friendlier rates meaningfully closes today’s affordability gap.

Until then, treating housing as a multi‑year plan rather than a single season’s decision can help you stay strategic instead of discouraged. A buyer’s market on paper may be out of reach right now, but the planning you do in this phase is exactly what will let you seize the moment when the data finally lines up with your reality.

Source: Ziggurat Real Estate