Philippine Property Slump to Extend to Late 2027, Pre-Sales Down 7%
Major developers like Ayala Land and SM Prime saw combined residential pre-sales fall in the first half of 2026, driven by excess supply and high borrowing costs.
Philippine Property Outlook Weakens
The Philippine residential property market is not expected to see meaningful recovery until late 2027, according to S&P Global Ratings. Corporate Ratings Analyst Johann Tan stated that persistent economic pressures, including rising costs and expensive borrowing, continue to suppress homebuyer demand.
This subdued outlook is also attributed to an oversupply of condominium units, which limits market absorption. Developers face challenges generating stronger residential sales in the near term.
Developers See Pre-Sales Decline
This weak market sentiment is reflected in the performance of the country's leading property firms. Ayala Land Inc., SM Prime Holdings Inc., Robinsons Land Corp., and Megaworld Corp. collectively reported a 7% decrease in residential pre-sales during the first half of 2026.
The volume of unsold properties remains a significant concern for these developers, impacting their ability to sustain sales growth and prompting a more cautious stance on new investments.
Regional Pressures and Strategic Shifts
The challenges in the Philippines mirror broader trends across Southeast Asia, where property developers are adjusting strategies due to higher construction and financing costs. Fiona Chen, associate director for Southeast Asia corporate and infrastructure ratings at S&P Global Ratings, noted that regional developers are re-evaluating project viability and pricing.
Companies are also focusing on strengthening their financial positions by managing capital expenditures, diversifying funding, and expanding recurring-income businesses to mitigate risks from weaker property demand and debt refinancing needs.
Investor Focus on Developer Resilience
For investors, the prolonged period of subdued demand means developers will prioritise resilience and strategic capital allocation. Firms are concentrating on core and affordable housing segments, which still account for a substantial portion of sales, despite exposure to inflation and consumer confidence shifts.
Developers are also exploring growth opportunities outside Metro Manila, where local supply and demand conditions are more favourable, while maintaining luxury projects for a smaller buyer pool. A sustained rebound hinges on easing macroeconomic pressures.
This article is journalism, not investment advice; consult a licensed professional before making financial decisions. Market data is indicative, may be delayed, and should be verified with your broker or exchange before use.
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