Housing developers' government tie-up seen as 'ray of light' for real estate sector

MANILA, Philippines — Property developers’ growing participation in government-backed housing programs is offering a potential avenue for reviving housing sales and expanding affordable homeownership.

This, even as the Philippine real estate industry grapples with a prolonged slowdown in condominium demand, Colliers Philippines said.

Joey Roi Bondoc, research director of Colliers Philippines, described the decision of major property developers to partner with the government’s housing initiatives as a positive development that could help move unsold condominium inventory while supporting efforts to provide more Filipinos with access to homeownership.

“To, somehow, make the unsold inventory move, it’s a good thing that major developers in the country joined government housing projects of the Department of Human Settlements and Urban Development and Pag-IBIG Fund’s Expanded 4PH, so that the industry keeps moving,” Bondoc said.

The partnerships bring private-sector housing inventory into the government’s Expanded Pambansang Pabahay para sa Pilipino (4PH) Program, while making housing financing available to qualified Pag-IBIG Fund members seeking more affordable homeownership opportunities.

The Department of Human Settlements and Urban Development said five major property developers have signed memorandums of understanding with Pag-IBIG Fund to support the expanded program.

These are Megawide Construction Corp.; Ayala Land Inc., through its housing brands Amaia and Avida; SM Development Corp.; Filinvest Land Inc.; and Robinsons Land Corp.

Under the agreements, participating developers will offer preferential rates and other incentives for housing units in selected projects to qualified Pag-IBIG Fund members covered by the Expanded 4PH Program.

The initiative creates an avenue for developers to make selected housing units available to a wider pool of prospective buyers, while giving qualified members access to housing offers supported by government financing.

Pag-IBIG Fund has also raised its maximum loanable amount to P10 million, potentially broadening financing options for eligible borrowers, although actual loan approval and affordability will still depend on the applicable lending requirements and the borrower’s capacity to pay.

Bondoc said the government-private sector collaboration was a step in the right direction, while stressing that the long-term demand for condominium units would need to be considered in determining how much the partnerships could help the market.

“It’s a step in the right direction. It’s a good program between the government and private developers,” he said.

Bondoc also pointed to growing demand for house-and-lot developments outside Metro Manila, indicating that developers would need to account for changing buyer preferences as they assess which housing products and locations offer the strongest market opportunities.

The government-backed partnerships come as the property industry seeks ways to connect available housing inventory with qualified buyers, making the program relevant both to the government’s homeownership objectives and to developers looking for additional channels to market their units.

The potential benefits of the partnerships come against a difficult backdrop for the condominium sector, where declining take-up, elevated financing costs and a substantial inventory of unsold completed units continue to weigh on market activity.

Bondoc said acquisitions of pre-selling condominium units — properties purchased before construction is completed — had dropped by an estimated 67% to 70% year on year, making the current period the weakest since Colliers began monitoring the market.

He cited approximately 3,000 acquisitions during the first nine months of the year, compared with 13,000 launches and 10,000 take-ups recorded in 2025. The figures refer to different market measures and periods, underscoring the sharp deterioration in pre-selling activity reported by Colliers.

Bondoc added that approximately 32,000 completed condominium units remained unsold or idle, reflecting the challenge developers face in matching existing supply with effective demand.

He attributed the slowdown to several factors, including elevated mortgage rates, higher prices of goods, subdued consumer spending, economic uncertainty and geopolitical tensions in the Middle East, as well as political developments that he said had made investors more cautious.

Mortgage rates of around 7.7% to 7.8% have made financing more expensive, according to Bondoc, adding to the upfront costs buyers must meet when purchasing condominium units through bank financing.

For units priced between P3.6 million and P7 million, he said the financial requirements could be beyond the reach of some prospective buyers, particularly those earning below P60,000 to P70,000 a month. (Contributed story)