THE Philippine property sector is entering a period of more cautious growth as weak economic expansion, softer household spending and geopolitical uncertainty prompt developers and occupiers to reassess investment and expansion plans, according to property consultancy Colliers Philippines.
The Philippine economy grew by just 2.3 percent in the second quarter, its weakest quarterly performance outside the pandemic in more than 16 years, bringing first-half growth to 2.6 percent.
Colliers said in its latest GDP Flash report released Sept. 28, 2026, that the slower economic growth has moderated activity in the office and residential property markets, although the environment is also encouraging developers and investors to become more disciplined in supply, investment and location strategies.
“Rather than signaling broad-based weakness,” Colliers said the more measured environment could position property firms for stronger growth in 2027.
Office market
Metro Manila office transactions fell 24 percent quarter on quarter amid geopolitical uncertainty, which has led companies to delay expansion decisions.
Despite this, flexible workspace demand remained resilient, with net take-up doubling year on year during the first half.
Colliers said occupiers are increasingly expected to adopt flexible workspaces and operating-expense-based delivery models to manage near-term market volatility.
The consultancy has also identified opportunities in regional markets as companies and property players look beyond Metro Manila for cost efficiencies and growth.
Housing demand shifts
Residential activity has also moderated, but demand remains concentrated in the economic and affordable housing segments.
These segments accounted for about two-thirds of Metro Manila condominium take-up in the first half, highlighting continued demand for lower-priced housing despite weaker economic conditions.
Colliers called for faster housing approvals and stronger public-private partnerships, as well as greater development outside Metro Manila, to support a more balanced housing market.
The slower growth in residential prices also underscores the need to improve household purchasing power and stimulate demand, the consultancy said.
Hospitality, industrial sectors hold up
Hospitality and industrial property are emerging as relatively resilient segments.
Colliers said the hospitality sector has maintained its growth trajectory, supported by recovering international arrivals, improving investment conditions and opportunities in the real estate investment trust market.
Industrial property demand, meanwhile, remains robust, particularly from semiconductor, food and beverage and fast-moving consumer goods manufacturers seeking modern facilities near ports and expressways.
Colliers said Central Luzon, in particular, is positioned to benefit from infrastructure improvements and the expansion of higher-value manufacturing.
For developers and investors, the consultancy identified hospitality, high-value manufacturing, flexible workspaces, affordable housing and regional expansion as areas where opportunities could emerge despite the broader economic slowdown.
The report also emphasized the importance of faster government infrastructure implementation and social-service spending to generate domestic demand, support employment and lay the foundation for sustained economic recovery. / KOC