Developers set sights on horizontal housing in regional growth areas

Property developers are targeting regional growth areas and pacing the rollout of horizontal residential projects this year, amid economic uncertainties and cautious buyer sentiment.

“We expect the horizontal segment to perform better, supported by steady end-user demand and a preference for larger living spaces,” SM Prime Holdings, Inc. President Jeffrey C. Lim said in an e-mailed reply to questions.

He added that demand for horizontal developments outside Metro Manila remains steady, supported by continued growth in overseas Filipino workers’ remittances, low inflation, and buyers’ increasing preference for larger homes.

Federal Land, Inc. President Jose Mari H. Banzon said the horizontal market remains a “safe investment,” but noted that external factors such as political concerns and geopolitical tensions could affect market sentiment.

“The current political and geopolitical noise have distracted the market from the fundamental soundness of horizontal residential investments,” he said in a Viber message.

Mr. Lim described SM Prime’s outlook for the horizontal residential segment as “cautiously optimistic,” citing potential risks from slower economic growth and weaker buyer confidence.

“As a result, we will remain selective in our 2026 project launches, focusing on locations where our developments have a clear market advantage and sound demand fundamentals,” he said.

The developer is also keeping its development phasing flexible depending on demand conditions while enhancing design and infrastructure to appeal to buyers.

Pueblo de Oro Development Corp. (PDO), known for its ‘live-work-play-learn’ communities, said more families and first-time buyers are seeking township-style living.

“PDO has a positive outlook for the horizontal residential sector in 2026, especially in regional growth corridors,” PDO President and Chief Operating Officer Prim B. Nolido said.

The company expects strong demand for horizontal residential projects in areas with robust economic growth, such as Batangas, Pampanga, Cebu, and Cagayan de Oro.

Mr. Nolido added that the segment could face challenges from rising construction and material costs, as well as competition from affordable housing.

For this year, SM Prime is set to launch a premium residential development within the Susana Heights village in Muntinlupa City and continue its Symphony Homes rollout in Pampanga.

Meanwhile, Federal Land plans to launch another residential subdivision in Biñan, Laguna, and General Trias, Cavite.

“We will also launch residential condominiums to replenish the depleting inventory of our successful projects in Pasig and Bonifacio Global City, catering to the high-end and luxury markets,” Mr. Banzon said.

Source: Business World

Colliers says housing prices may have recovered in Q4

Residential property prices may have picked up in the fourth quarter after the slump a quarter earlier, Colliers Philippines said.

“Similar to what we have seen previously, the fourth quarter is traditionally a strong quarter for residential take-up whether within or outside Metro Manila, whether it’s condominiums or horizontal,” Joey Roi H. Bondoc, director and head of research at Colliers Philippines, said.

The Bangko Sentral ng Pilipinas (BSP) Residential Property Price Index indicated that housing prices nationwide posted its weakest growth ever in the third quarter at 1.9%.

This was a sharp slowdown from the 7.5% growth posted in the three months to June and the year-earlier 7.6%.

The BSP also reported that lower real estate investment brought banks and trust entities’ real estate exposure down to 19.54% at the end of September from 19.61% at the end of June and 19.55% a year earlier.

Real estate loans climbed 8.9% year on year to P3.096 trillion at the end of September, but real estate investment slipped 5.75% to P354.749 billion.

Mr. Bondoc said yearend bonuses and inflows of remittances from overseas Filipino workers could have spurred demand for residential property in the fourth quarter.

He also noted that the peso’s recent weakness may prompt migrants, especially those from North America, to send more money home.

The peso has been trading between P58 to P59 to the dollar since October, hitting a fresh record low of P59.22 on Dec. 9.

However, Mr. Bondoc said elevated mortgage rates may still continue to dampen housing price growth in the near term, but any potential rate reduction could help property take up and price growth by this quarter next year.

“I think we need to watch out for the… possible reduction in mortgage rates, given that there has been a substantial decline in basic policy rates by the central bank,” he added.

“And if that happens, that will provide a better impetus for a spike in residential demand, and therefore residential prices, starting (in the) first quarter of 2026.”

The BSP ended the year with a fifth straight 25 basis-point (bp) cut on Dec. 11, bringing its total reductions on key borrowing costs to 200 bps since August 2024. The benchmark policy rate is currently at an over three-year low of 4.5%. 

Mr. Bondoc said lowering the mortgage rate between 6% and 6.5% from the current 7.8% could help the property industry by raising confidence among buyers.

“But the concern is that they have not been lowering their mortgage rates,” he added. “If they start doing that next year, 2026, I think (that will be) a very good sign that demand and then prices might recover faster because of this lower mortgage rate.”

Source: Business World

Metro Manila condo inventory may take up to three years to clear

Unsold condominium units in Metro Manila could take about two to three years to be fully absorbed, particularly in areas previously occupied by Philippine offshore gaming operators (POGOs), property consultancy Leechiu Property Consultants (LPC) said.

“I think it will still take about two years, probably three years, to clear out the POGO-induced supply, especially in central business districts where there was heavy POGO presence,” Roy Amado L. Golez, Jr., LPC director for research, consultancy, and valuation, told a media briefing on Wednesday.

As of end-November 2025, Metro Manila’s middle-income condominium inventory rose to 80,300 units across 578 actively selling buildings, up from 74,600 units in the previous quarter. This represents roughly three years and six months of available supply.

Of the total, 53,900 units are pre-selling, while 26,400 are ready-for-occupancy. Quezon City recorded the highest number of unsold condominiums at 19,300 units, followed by the Ortigas area and the cities of Mandaluyong, Pasig, and San Juan with 14,200 units, and the Bay Area with 13,000 units.

Metro Manila continues to grapple with an oversupply of units in the upper middle income to upscale segments, typically priced between P4 million and P12 million, particularly in areas affected by last year’s government POGO ban.

“Fewer speculative buyers dampen primary take-up, while motivated sellers from the POGO period compete in the secondary market with aggressive pricing, further slowing absorption,” LPC said.

Residential demand in the first 11 months of 2025 fell to a six-year low of 24,732 units, down from 42,563 units sold in the same period of 2020. Year on year, units sold declined by 3% from 25,565 units in the first 11 months of 2024.

“But then, there’s still one more month to go, so hopefully developers can sweep all the potential sales and catch up,” Mr. Golez said.

New condominium launches as of end-November dropped by 60% to 5,256 units from 13,226 units a year ago, marking the lowest level since 29,739 units launched in 2020.

“We have a market here where developers are conscious of inventory and are also experiencing low sales. At the same time, reservation sales and actual sales have been flattening or tapering off,” Mr. Golez said.

“The issue in the last few years is that price increases have been too aggressive for many developers,” he added.

Despite the high inventory of unsold units, the Philippines continues to face a growing housing backlog, Mr. Golez noted.

In the office sector, global capability centers (GCCs) — firms specializing in healthcare, finance, and other services — are expected to drive tenant demand in 2026.

“As we enter next year, there is a high probability that tenants will continue to require spaces of 5,000 to 10,000 square meters (sq.m.), especially among global capability centers,” LPC Director for Commercial Leasing Mikko Barranda said.

Year-to-date, office leasing demand in Metro Manila grew 10% to 1.22 million sq.m. from 1.11 million sq.m. during the same period in 2024. The information technology-business process management sector accounted for 549,000 sq.m., followed by traditional firms at 563,000 sq.m., global capability centers at 174,000 sq.m., and government tenants at 74,000 sq.m.

Vacated office space in the fourth quarter fell 59% to 85,000 sq.m. from 205,000 sq.m. in the previous quarter. Year-to-date, LPC recorded 744,000 sq.m. of vacated space.

“As tenants realize that certain districts have a very tight market for certain space sizes, we will likely see spillover activity into other districts,” Mr. Barranda said.

At present, Metro Manila has an office vacancy of 18%, with Bonifacio Global City still the most favored location with a 9% vacancy rate, followed by Makati City at 15%.

Source: Business World