OFW remittances, rate cuts to boost housing demand — Colliers

The demand for mid-income residential properties in Metro Manila may find renewed momentum as interest rate cuts and steady remittance inflows from overseas Filipino workers (OFWs) are expected to buoy the segment, real estate services firm Colliers Philippines reported.

In its First Quarter Metro Manila Residential Report, Colliers projected a tempered pace in new launches of mid-income condominiums over the next three years. However, the firm said lower borrowing costs and sustained cash remittances could provide a much-needed lift to housing demand.

“Colliers is optimistic that further interest rate cuts and sustained remittances from Filipinos working abroad should partly lift the demand for mid-income projects,” the report stated.

During the first quarter of 2025, pre-selling launches reached 5,300 units — the highest quarterly figure since Q3 2023. Among the key projects introduced were Avida Towers Makati Southpoint Tower 3 by Avida Land in Makati, Urban Deca Tondo – Building 7 by 8990 Holdings, Inc., and Haraya Residences – North Residences by Shang Robinsons Properties in Bridgetowne, Pasig.

Despite the spike in launches, actual sales remained soft, with net take-up recorded at just 87 pre-selling units for the quarter. Back-outs, particularly in older developments, reached 4,700 units, with the lower and upper mid-income segments comprising 65% of the total.

The Bangko Sentral ng Pilipinas (BSP) reduced its benchmark interest rate by 25 basis points to 5.5% in April. BSP Governor Eli Remolona Jr. indicated the possibility of two more rate cuts within the year, with one potentially coming as early as June.

Meanwhile, BSP data showed that cash remittances from OFWs grew by 2.7% in the first quarter — a key factor that Colliers believes will aid in sustaining residential demand.

“Lower interest rates should result in lower mortgage rates, and this should guide developers with their promos and payment schemes,” the report added.

Colliers urged developers to adjust their strategies by offering more flexible payment options for ready-for-occupancy units, including leasing programs and early move-in incentives.

The report also recommended that developers evaluate the right product mix and pricing for strategic locations. While upscale and luxury condominiums continue to perform well in prime business districts such as Fort Bonifacio, Makati CBD, and the Bay Area, mid-income housing remains in demand in fringe areas like Alabang–Las Piñas, Mandaluyong, Makati Fringe, Manila North, and the CAMANAVA corridor.

Colliers forecast Metro Manila’s residential vacancy rate to hit an all-time high of 26% in 2025, exacerbated by the complete withdrawal of Philippine offshore gaming operators (POGOs) and the influx of newly completed condominium units.

New supply from 2025 to 2027 is projected to average 5,800 units per year, a sharp drop from the 13,000-unit annual average seen between 2017 and 2019, when POGO activity drove housing demand.

“Despite the anticipated slowdown, it is not all doom and gloom for the residential market,” Colliers said. “Recovery will focus around launching the ideal residential product at the right location with a viable price and favorable terms.”