Philippine property market braces for tougher months as home prices outpace wages

Leechiu says housing affordability could remain under pressure over the next two quarters, although it does not expect a property market crash.

Homeownership is becoming more difficult to attain as property prices continue to outpace wage growth, with the real estate sector expected to face another challenging six months.

Leechiu Property Consultants, a real estate advisory and brokerage firm, said residential property prices in Metro Manila have risen 63% over the past six years, while wages have increased by just 20%, making it harder for many Filipinos to keep pace with housing costs. The firm expects the affordability divide to widen further over the next two quarters as slower economic growth, elevated inflation, and higher interest rates continue to weigh on the market.

Despite the headwinds, Leechiu said it does not expect a property market crash. The firm cited the country’s strong economic fundamentals, including high local ownership, steady remittances, continued expansion of the business process outsourcing industry, and a young population expected to support long-term housing demand.

Developers are also working through unsold inventory by offering discounts and more flexible payment terms, while banks continue to extend credit to the real estate sector despite higher borrowing costs.

Leechiu also said about 95% of property owners in the Philippines are locals, helping support the market despite the challenging environment. The firm added that the country’s unchanged credit ratings point to an economy that remains fundamentally resilient.

The outlook suggests demand could remain under pressure in the near term even as the broader market stays on stable footing.

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