PH real estate sector faces tougher 2026
A potent mix of domestic graft and distant drums of war is cooling the Philippine property market, as a sweeping corruption scandal and prolonged conflict in the Middle East push homebuyers and landlords into retreat.
Data from the Bangko Sentral ng Pilipinas (BSP) showed that real estate loans from local banks and their trust units totaled P3.2 trillion as of December 2025, up nearly 7 percent from a year earlier. That accounted for 18.93 percent of banks’ total lending portfolios—well below the central bank’s 25-percent exposure cap.
Even so, the share was the smallest since the fourth quarter of 2018, when the ratio stood at 18.66 percent.
In a phone interview, David Leechiu, chief executive of Leechiu Property Consultants, said the decline reflected a dual retreat by wary buyers and developers following a corruption scandal that gutted confidence in the market.
The strain is especially visible in the residential segment. Home prices in the country rose just 1.6 percent year-on-year in the final three months of 2025, the slowest pace since the first quarter of 2019, the central bank reported.
Prices of single-attached and detached houses, apartments, townhouses and duplexes barely moved, rising only 0.1 percent. Condominium prices, however, climbed 3.5 percent, their fastest increase in three quarters.
Lending activity has also cooled sharply. The number of housing loans granted grew 4.1 percent year-on-year, a steep slowdown from 24.6 percent in the previous quarter. On a quarterly basis, home loans growth eased to 8.4 percent from 16.5 percent.
And the outlook is growing more uncertain.
Leechiu said an oil-price shock tied to the Middle East conflict threatens to squeeze household budgets, particularly for overseas Filipino workers who could face displacement. Landlords, facing heightened market volatility and sticky interest rates, may focus on propping up battered stock prices and strengthening balance sheets rather than borrowing to finance new projects.
“Developers are purposely cutting debt and retiring debt because of the high interest rates,” Leechiu said. “And now with this war going on, they will retire even more debt.”
“The most interesting is that many investors are moving from building more buildings to buying equities in Philippines,” he added. “The sentiment has hit their stock so badly.”
Joey Bondoc, director for research at Colliers Philippines, said risks to the residential market are likely to persist amid the war in the Middle East.
“I think, given that there are uncertainties right now, some households might stick to the basics,” Bondoc said in a separate phone interview. “For some of these remittance-receiving households, especially those depending on Middle Eastern remittances, they might hold off major big-ticket purchases like cars and real estate.”
