BPO offices boom while residential demand braces for remittance dip.
An ongoing conflict in the Middle East is starting to weigh on home buying in Central Luzon, with potential spillover into household spending and business activity across the region.
Property consultant Colliers Philippines warned that tensions could soften residential demand as families brace for weaker remittance flows. About 18% of total remittances come from overseas Filipino workers in Saudi Arabia, the UAE, Qatar, and Kuwait. Many of these workers typically drive demand for house-and-lot units priced between ₱2.5 million and ₱7 million, largely intended for end use rather than investment.
Prior to the escalation, demand in this segment was holding steady, supported by a consistent pipeline of buyers from overseas. That momentum now faces uncertainty as rising oil prices and broader inflation risks begin to affect how much money families receive and how they choose to spend it.
Prioritizing essentials over equity
As household budgets tighten, essential expenses are likely to take priority, pushing property purchases further down the list. This shift does not stop at housing. Retail activity, which relies heavily on remittance-driven consumption, may also see slower growth as discretionary spending eases.
The pressure may extend to businesses as well. Companies dealing with higher operating costs could start reassessing expansion plans, raising concerns for sectors like warehousing that depend on steady demand from both consumers and tenants.
Some segments continue to show resilience. The office market in Pampanga remains active, with BPO firms absorbing around 43,000 square meters of space annually, equivalent to roughly 20 floors. Vacancy rates have improved to 16.8% from 32.3% in 2023, supported by ongoing expansion and infrastructure projects that continue to improve connectivity in Central Luzon.
Property consultant Colliers Philippines flags a potential slowdown in Central Luzon residential demand as families brace for weaker remittance flows amid the escalating Middle East conflict.
