The segment accounted for 74 percent of take-up in the first quarter of 2026, up from just 27 percent a quarter earlier, highlighting where demand is holding as the market grapples with condo oversupply and war jitters.
Low-end demand takes over
“The residential market is being buoyed by affordable and economic segments due partly to government intervention, but the inventory life continues to improve,” said Joey Roi Bondoc, Colliers Philippines director for research.
This comes as broader market conditions remain soft, with vacancy projected to hit 25.6 percent by end-2026 as supply continues to build.
Supply overhang persists
About 13,000 new units are expected this year, up 74 percent year-on-year, adding to an already elevated inventory base.
Unsold stock stands at about 78,000 units, with absorption estimated at 6.8 years.
“We are closely monitoring residential take up especially from Middle East-based OFWs particularly as remittances from the region covered nearly a fifth of total remittance inflows in 2025,” Bondoc explained.
Retail growth provides offset
Retail is providing a brighter spot, with vacancy easing to 10.8 percent in the first quarter, the lowest since 2020, as limited new supply meets steady tenant demand. Foreign brands, particularly in food and beverage, fast fashion, and wellness, continue to drive mall absorption.
“There’s limited completion of new retail space but the good news is that foreign retailers continue to absorb physical mall space. Achieving pre-covid mall vacancy (below 10 percent) in Metro Manila might be delayed by about 3-6 months due to the ME crisis and rising fuel costs. We continue to see the proliferation of foreign retail brands especially [food and beverage]," Bondoc said.
Vacancy is expected to ease further this year, although a full return to pre-pandemic levels has been pushed back to the first half of 2027.
—Edited by Miguel R. Camus
