Real estate developers in the Philippines are increasingly participating in government-backed housing initiatives as a strategy to address a prolonged slowdown in condominium demand. By integrating private-sector inventory into the Department of Human Settlements and Urban Development’s (DHSUD) Expanded Pambansang Pabahay Para sa Pilipino (4PH) Program, developers aim to move unsold units while expanding affordable homeownership options. Joey Roi Bondoc, research director at Colliers Philippines, noted that these partnerships provide a necessary channel for developers to reach qualified buyers through Pag-IBIG Fund financing. Five major developers—Megawide Construction Corp., Ayala Land Inc. (via its Amaia and Avida brands), SM Development Corp., Filinvest Land Inc., and Robinsons Land Corp.—have signed memorandums of understanding with the Pag-IBIG Fund to support the program. Under these agreements, developers offer preferential rates and incentives on selected projects to qualified Pag-IBIG members. The initiative coincides with a significant contraction in the condominium market. According to Colliers, pre-selling condominium acquisitions have declined by an estimated 67% to 70% year-on-year, representing the weakest performance since the firm began tracking the sector. Data indicates that approximately 32,000 completed condominium units remain unsold. Bondoc attributed the market slump to a combination of macroeconomic factors, including elevated mortgage rates—currently ranging from 7.7% to 7.8%—which have increased the cost of financing. He noted that for units priced between P3.6 million and P7 million, the required monthly income and down-payment thresholds have become prohibitive for many prospective buyers. Additional pressures include high inflation, subdued consumer spending, geopolitical tensions, and economic uncertainty. The rental market has also faced challenges following the exit of Philippine offshore gaming operators (POGOs). The departure of Chinese workers, who previously accounted for a significant portion of demand for high-rise residential units, has further impacted the sector. This follows a period of strong performance between 2017 and 2019, prior to the pandemic and the subsequent regulatory prohibition of offshore gaming. While Bondoc described the collaboration between the government and private developers as a “step in the right direction,” he emphasized that the long-term impact of the 4PH program will depend on sustained demand. He also noted that developers are increasingly looking toward house-and-lot developments outside Metro Manila to align their offerings with shifting buyer preferences. As the industry navigates these challenges, the government and private sector continue to work toward aligning housing supply with the financial capacity of prospective homeowners.
Article source: The Daily Tribune | Image credit: The Daily Tribune