Beyond NCR: Where Philippine housing demand is growing
The 2020 Philippine Statistics Authority (PSA) census shows that of the country’s 26.4 million housing units, 82 percent are owned and 6 percent or 1.58 million were purchased through any form of financing: 4 percent or roughly 1 million through government programs like Pag-IBIG, and 2 percent or about 500,000 through bank loans.
The remaining owned units were either inherited or self-funded outright.
This limited use of financing makes the recent pickup in bank lending especially significant.
Data from Bangko Sentral ng Pilipinas (BSP) showed outstanding residential real estate loans hitting P1.229 trillion as of March 2026, up 8.38 percent from P1.134 trillion a year earlier—evidence that formal credit is slowly deepening even as the broader economy absorbs shocks.
Housing backlog
The bigger societal story is unmet demand.
The Department of Human Settlements and Urban Development (DHSUD) pegs the national housing requirement at 5.8 million units, though government figures cite a narrower backlog of roughly 2.2 million homes.
Socialized, economic, and low-cost segment—priced up to P2.5 million—account for 98.4 percent; mid-cost and high-end housing account for the remaining 1.4 percent and 0.2 percent, respectively.
This is not a market short on land or capital. It is a market short on affordable supply matched to where people actually need to live.
Big time developers typically target mid and luxury markets while the government usually takes charge of the low-cost housing through its housing loan programs.
Shifting demand
Geographically, demand has been shifting—from the National Capital Region (NCR) to Balance Greater Manila Area (GMA), an area composed of Pampanga and Bulacan in the north, and Cavite, Laguna, and Batangas in the south, along with Rizal.
This corridor now captures 40 percent of residential loans against NCR’s 29 percent, a reversal in terms of percentage share versus pre-pandemic loan share.
The reason is straightforward: houses in Balance GMA are roughly 57 percent cheaper than NCR while condos are about 32 percent cheaper. The Luzon Spine Expressway Network—backed by a P9-trillion infrastructure pipeline including Cavite-Laguna Expressway (Calax), Central Luzon Link Expressway (CLLEX), and the NLEx-SLEx Connector—is compressing travel times along this corridor making the residential developments in this area attractive.
Buyers are increasingly betting that prices there will keep climbing as connectivity improves and masterplanned townships populate the area.
Rising property prices
Residential prices also continue to rise.
The BSP’s Q1 2026 Residential Property Price Index (RPPI) showed a 7.45-percent compound annual growth rate nationwide from 2019 through the first quarter of 2026, with NCR houses compounding at 8.84 percent and NCR condos at 7.59 percent.
Both outpaced areas outside NCR (AONCR), making a strong case for NCR condominiums despite the oversupply and the expected policy interest hikes of the BSP.
Quarter-on-quarter, NCR condos grew 13.2 percent. In 2025, we observed confidence and continued interest of overseas Filipino workers (OFWs) on the country’s condominium market.
The residential prices’ seven years of sustained, above-inflation appreciation—amid the pandemic, exit of Philippine offshore gaming operators (Pogos), the current oversupply cycle, and now the war in Iran—reflect the residential market’s resilience.
Limited supply
Further, the huge price disparity between NCR and Balance GMA house prices can also be attributed to limited land supply in the NCR.
Hence, well-located Metro Manila land parcels that can be horizontally masterplanned are highly attractive to investors and serious lot buyers.
Signature Series by SM Residences in Susana Heights is a case in point. A financially strong, publicly listed developer building on a scarce, sizable Metro Manila parcel is the kind of project that continues to command demand even as some developers pull back.
That pullback is deliberate and it is the right call for some segments of the industry to allow some recalibration.
Approved residential condominium floor area collapsed to just 58,734 sqm in the second quarter from 141,735 sqm in the first three months of 2026. Nationwide residential building permits also fell to roughly 14,700 units from a peak above 38,000 units.
Developers are managing new supply down precisely to work through years of accumulated oversupply, protecting prices rather than chasing volume into a higher-rate environment. That discipline is what is allowing prices to keep rising even as sales volumes stay cautious.
Recovery phase
Based on the real estate cycle that the Lobien Realty Group (LRG) tracks, residential market currently sits in the “recovery” phase, historically the best entry point for new investment.
BSP’s policy rate at 4.75 percent is still expected to increase and may remain elevated longer than originally hoped, and the Iran war has added fresh headwinds on inflation and OFW remittances.
The opportunity in the residential market is real, but it rewards patience, precise timing, and good location over speed and over exuberance.
If 2026 shapes up to be a repeat of 2025 plus some pockets of opportunities for the residential market, which is our fearless forecast at LRG, then it can be considered as another good year for the residential segment.
The author is the CEO of Lobien Realty Group
