Philippine property slump seen extending into 2027
The Philippine residential property market is unlikely to regain significant momentum before late 2027 as excess condominium supply, rising costs, and expensive borrowing continue to constrain homebuyer demand.
Manila, Philippines - The Philippine residential property market is not expected to regain significant momentum before late 2027, according to S&P Global Ratings. Excess condominium supply, rising costs, and expensive borrowing continue to limit demand from homebuyers. Four major developers - Ayala Land Inc., SM Prime Holdings Inc., Robinsons Land Corp., and Megaworld Corp. - all saw a 7% drop in residential pre-sales in the first half of 2026.
Analyst Johann Tan said the market's recovery hinges on easing macroeconomic pressures, which have made it harder for buyers to afford homes and slowed the absorption of available units. The surplus of unsold properties further constrains developers' growth and investment plans. Developers are focusing on core and affordable housing, but demand in this segment is vulnerable to inflation and consumer confidence.
Property firms are being more selective about where to allocate capital, prioritizing projects that can generate sustainable returns. Developers are also selecting regions with more favorable supply and demand conditions, such as areas outside Metro Manila, while luxury projects remain limited to a smaller pool of buyers. This situation reflects broader challenges across Southeast Asia, where higher construction costs and financing expenses are forcing property developers to rethink their strategies.
Fiona Chen, an associate director at S&P Global Ratings for Southeast Asia corporate and infrastructure ratings, noted that developers across the region are adjusting their plans to accommodate buyers' sensitivity to prices and their ability to afford housing. To mitigate risks, companies are managing capital expenditures, diversifying funding sources, and expanding recurring-income businesses.
For the Philippine residential sector, a sustained recovery remains a longer-term prospect, as unsold inventory and economic headwinds continue to weigh on sales. Developers may need to navigate a prolonged period of subdued demand before market conditions significantly improve.
Written by urgent.news from Philippine Star Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
