Housing prices post slower growth in 1st quarter

Residential property prices in the Philippines continued to increase, although at a slower pace, during the first quarter of 2025 (Q1 2025), the Bangko Sentral ng Pilipinas (BSP) reported.

Year-on-year growth of the Residential Property Price Index (RPPI) slowed to 7.6 percent in January-March from 9.8 percent in the last three months of 2024. On a quarter-on-quarter basis, prices reversed from the fourth quarter of last year’s 1.0-percent drop, growing by 2.6 percent.

The National Capital Region (NCR) led residential property price growth with a 13.9-percent increase, significantly higher than the 3.0 percent observed in the rest of the country. Quarter on quarter, the NCR saw a 9.2-percent expansion while areas outside it recorded a 2.1-percent drop.

All areas outside the NCR, with the exception of Metro Cebu, recorded higher prices. Houses in Mindanao became 7.6-percent pricer, followed by the rest of the Greater Manila Area (GMA) at 3.8 percent and other areas in the Philippines at 1.1 percent.

Metro Cebu, on the other hand, registered a 1.7-percent drop — its first annual decrease since the first quarter of 2023.

All housing categories contributed to the higher prices, with condominiums and houses recording growth rates of 10.6 percent and 4.5 percent, respectively. Houses measured include single-attached, detached, town houses, duplexes and apartments.

Quarter on quarter, condominium prices grew by 9.9 percent, offsetting a 2.9-percent drop for houses.

The median price for all housing types was P3.37 million, the BSP said, lower than the P4.34 million for condominiums but above the P2.95 million for houses.

Houses in the NCR were the most expensive with a median price of P7.7 million, while condominiums in other areas in the Philippines were the cheapest at P2.5 million.

Residential real estate loans taken out during the first quarter, meanwhile, were mostly used to purchase new housing units (73.2 percent), with the remaining 26.4 percent and 0.5 percent used to buy pre-owned and foreclosed properties.

By type of housing, 63.7 percent of the loans were used for houses and the rest for condominiums.

Just over a fourth, or 27.4 percent, of the property loans were granted in the NCR. Calabarzon (Cavite, Laguna, Batangas, Rizal and Quezon) accounted for 29.9 percent; Central Luzon, 13.8 percent, Central Visayas, 9.6 percent; Western Visayas, 7.9 percent; Davao, 4.5 percent; and Northern Mindanao (2.5 percent).

The NCR and these six regions accounted for 95.6 percent of housing loans granted by banks, the BSP said.

The RPPI calculates the average change in prices of different kinds of housing units over time from bank data on loans made to purchase residential properties.

The quarterly index, beginning the first quarter of 2025, now uses a different methodology to align with international best practices and has been renamed from the Residential Real Estate Price Index. Among others, it now uses acquisition cost instead of appraised value, and the property type has been expanded to include pre-owned and foreclosed units instead of just new ones.

Instead of just the NCR and areas outside it, the latter has further been divided into balance GMA, Metro Cebu, Metro Mindanao and other areas in the Philippines.

Source: Manila Times

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