OFW remittances, rate cuts may lift housing demand

Metro Manila's residential market is projected to see tempered launches of mid-income condominiums over the next three years, although anticipated interest rate cuts and steady inflows of remittances from overseas Filipino workers (OFWs) could help support demand for the segment, according to Colliers Philippines.

“Colliers is optimistic that further interest rate cuts and sustained remittances from Filipinos working abroad should partly lift the demand for mid-income projects,” Colliers said in its First Quarter Metro Manila Residential Report.

Pre-selling launches in the first quarter reached around 5,300 units, marking the highest quarterly level since the third quarter of 2023, Colliers said.

Among the notable projects launched during the period were Avida Land’s Avida Towers Makati Southpoint Tower 3 in Makati; 8990 Holdings, Inc.’s Urban Deca Tondo – Bldg. 7 in Tondo; and Shang Robinsons Properties’ Haraya Residences – North Residences in Bridgetowne, Pasig.

Despite the higher volume of launches, net take-up reached only 87 pre-selling units during the period, Colliers said.

Total back-outs, particularly for older developments, rose to 4,700 units in the first quarter, with the lower and upper mid-income segments accounting for 65% of the total.

Colliers said the central bank’s monetary easing, along with continued OFW remittance inflows, is likely to support a recovery in residential demand.

The Bangko Sentral ng Pilipinas (BSP) cut its policy rate by 25 basis points to 5.5% in April.

BSP Governor Eli M. Remolona, Jr. said the Monetary Board is open to two more rate cuts this year, with one possibly as early as June.

Cash remittances rose by 2.7% in the first quarter, based on BSP data.

“Lower interest rates should result in lower mortgage rates, and this should guide developers with their promos and payment schemes,” Colliers said.

In response, developers are advised to offer more flexible and curated payment terms for ready-for-occupancy (RFO) units, including leasing and early move-in promotions, it added.

Colliers also noted that developers must assess optimal product types and price points when expanding in key locations.

Upscale to luxury projects continue to perform well in central business districts such as Fort Bonifacio, the Makati Central Business District, and the Bay Area.

Meanwhile, mid-income projects remain more attractive in fringe locations such as Alabang–Las Piñas, Manila North, Makati Fringe, Mandaluyong, and the Caloocan–Malabon–Navotas–Valenzuela (CAMANAVA) corridor.

The residential vacancy rate in Metro Manila is expected to reach an all-time high of 26% in 2025, driven by the complete exit of Philippine offshore gaming operators (POGOs) and the scheduled completion of new condominium developments.

Colliers expects pre-selling launches to remain subdued in the near term.

From 2025 to 2027, new supply in Metro Manila is projected to average 5,800 units annually, down significantly from the 13,000-unit yearly average recorded from 2017 to 2019, during the peak of POGO-driven demand.

Despite the projected slowdown, Colliers said it is “not all doom and gloom” for the Metro Manila residential market.

“Recovery will focus around launching the ideal residential product at the right location with a viable price and favorable terms,” it said.

Source: Business World

New mid-income condo launches unlikely in the next 3 to 4 years

It may take up to four years before launches of new middle-income residential condominium projects in Metro Manila begin picking up again, amid lingering oversupply in the market, according to real estate consultancy firm Cushman & Wakefield.

“Based on historical experience, it will take about three to four years before the market begins to react again and new launches will be announced,” Claro dG. Cordero, Jr., director and head of research, consulting and advisory services at Cushman & Wakefield, said at a news briefing.

The Metro Manila condominium market, particularly for the middle-income segment, continues to experience excess inventory, Cushman & Wakefield said.

“Prior to the pandemic, I think the annual launches were about, on average, 15,000 units a year from around 2005 up to 2020. After the pandemic, we noticed that the launches have gone down to about 5,000 [units] annually,” Mr. Cordero said.

In its first-quarter property market report, Cushman & Wakefield estimated there are around 450,000 units available in the middle-income and high-end segment.

Mr. Cordero said the high-end residential condominium segment has maintained its growth momentum, while noting an increasing demand for house and lot properties outside Metro Manila.

“For residential condominium markets, investors are shifting again towards high-end residential for capital appreciation, and rental yields have remained attractive in major central business districts like Makati, Ortigas, and Bonifacio Global City,” he said.

This year, Cushman & Wakefield said around 5,000 units will be added to the available supply in Metro Manila, covering middle-income to luxury residential segments.

Meanwhile, high vacancy rates persist in the office sector due to hybrid work schemes, policy changes and the exit of Philippine offshore gaming operators (POGO), Mr. Cordero said.

He said the Metro Manila office vacancy rate rose to 17.3% in the first quarter, from 16.5% in the same period a year ago.

The Metro Manila office sector has a consolidated stock of 9.83 million square meters (sq.m.), mostly Prime and Grade “A” facilities. About 69,200 sq.m. of new supply was added in the first quarter, Mr. Cordero said.

“We’re looking at again more than half a million square meters [of new supply] by end of 2025 mainly coming from Quezon City, Makati and Taguig,” he also said. “We’re looking at persistently high vacancy rates over the next few quarters.”

In the first three months of the year, headline rents averaged P987 per sq.m. per month — declining annually by 2.4% — reflecting pressures from excess supply in the market, Mr. Cordero said.

Despite a positive net absorption of 32,000 sq.m. year-to-date, demand remains “on the low side” due to office spaces that have remained vacant since the exit of POGOs.

“The overall absorption rate is positive, but some areas like Parañaque and Quezon City still have negative absorption figures because of the amount of spaces vacated by the POGO industry,” Mr. Cordero said.

To attract tenants, office developers in Metro Manila should consider offering flexible leasing strategies and fit-out incentives, Mr. Cordero said.

Meanwhile, the retail sector is expected to stay resilient, driven by the growing middle class as well as new commercial developments outside the Philippine capital.

“We’re seeing a significant supply of new shopping mall developments outside of Metro Manila primarily by SM [Prime Holdings, Inc.] and Ayala [Land, Inc.],” Mr. Cordero said.

These malls are expected to complement developers’ township projects in regional areas, he added.

Cushman & Wakefield said around 250,000 sq.m. of new retail spaces came online in the January-March period, while it expects a total of 345,000 sq.m. to be completed by end-2025.

Source: Business World

How Infrastructure is Transforming Housing Choices in the Philippines

The way Filipinos choose where to live is evolving, and infrastructure development is driving this transformation. With PHP 1.54 trillion allocated to major projects in 2024 alone, the country is seeing significant improvements in roads, transport systems, and interregional connectivity. These developments are expanding housing options beyond Metro Manila, creating new residential hubs and investment opportunities in emerging cities.

The Shift from Congestion to Connectivity

For decades, homebuyers prioritized properties within Metro Manila’s business districts, where employment opportunities were concentrated. However, this often came at the cost of long commutes and expensive real estate. Now, major expressways, rail systems, and bridges are reshaping how and where people choose to live.

The completion of projects like the North-South Commuter Railway, Cavite-Laguna Expressway (CALAX), and Metro Manila Subway is reducing travel times and making suburban living more convenient and attractive. As a result, Bulacan, Pampanga, Laguna, Cavite, and Batangas are experiencing a surge in demand from homebuyers looking for better accessibility and more affordable housing options.

The Impact of Metro Manila’s Traffic on Housing Preferences

Metro Manila’s traffic congestion remains a major challenge, ranking 27th globally in congestion levels and 14th in travel time according to the 2024 TomTom Traffic Index. Commuters lose an estimated 127 hours per year during rush hour, with an average travel time of over 32 minutes per 10 kilometers.

With this reality, many Filipinos are reconsidering their housing choices. Rather than endure daily traffic, more buyers are exploring homes in well-connected suburban cities where new transport projects are cutting travel times while offering a higher quality of life.

The Rise of Township Living

As connectivity improves, real estate developers are expanding master-planned communities and townships, integrating residential, commercial, and office spaces within a single location. Today, there are over 120 townships covering 134,000 hectares nationwide, offering residents the convenience of living near workplaces, retail hubs, and entertainment centers.

These townships cater to the changing preferences of homebuyers, who now prioritize walkability, sustainability, and smart living features. With work-from-home and hybrid work arrangements becoming the norm, these communities provide flexible and modern housing options that align with today’s lifestyles.

Affordability Challenges and Investment Opportunities

While infrastructure expansion is unlocking new residential markets, the rising cost of land, construction, and financing presents affordability challenges. However, developers and financial institutions are introducing creative payment terms, lower down payments, and flexible mortgage options to make homeownership more accessible.

For investors and homebuyers, emerging locations present strong opportunities. Properties in areas with ongoing transport projects are expected to appreciate significantly in the coming years, making them ideal for long-term investments. These areas not only offer more affordable real estate compared to Metro Manila, but also provide larger living spaces, modern amenities, and less congestion—key factors for those seeking a higher quality of life.

Looking Ahead: The Future of Housing in an Infrastructure-Driven Market

With continuous improvements in road networks, rail systems, and airport expansions, the Philippine real estate market is set for sustained growth. Homeownership is no longer limited to Metro Manila’s urban core—buyers now have greater location flexibility and more diverse housing choices.

For those planning to invest, understanding how infrastructure impacts property values is key. Areas that are currently more affordable but have upcoming transport projects will likely see strong price appreciation. Making strategic housing decisions early can lead to better returns and an improved living experience.

As the country continues to expand its infrastructure, real estate investment is becoming more dynamic than ever. The future of housing lies in accessibility, well-planned communities, and seamless mobility, where Filipinos can live, work, and thrive in a fully connected nation.

Source: Leechiu