Amid a glut of condominium units in certain parts of Metro Manila, the Philippine residential property market is primed for a turnaround — particularly in the house and lot segment.

Colliers Philippines Research Director Joey Roi Bondoc said those with the highest potential for growth are projects outside Metro Manila, where there is a supply glut of condominium units amounting to 70 months' worth of unsold inventory, or about six years.

He noted that what will sustain the residential sector's expansion is growth outside Metro Manila, the continued increase in prices (especially in property hotspots), interest rate cuts, a projected rise in remittances, the Philippines' fast GDP growth, and the further differentiation of master-planned projects.

Bondoc said prices of house and lot projects have grown by an average of seven percent to eight percent annually from 2016 to 2023. There is also aggressive growth in resort or leisure developments outside Metro Manila.

Meanwhile, interest rate cuts will result in lower mortgage rates, further stoking demand in the residential sector. This will also get a boost from the projected three percent growth in remittances from overseas Filipino workers.

With the strong growth of the economy, Bondoc said there is a lot of optimism, confidence, and positivity that the real estate sector will be boosted by the government's infrastructure projects.

Colliers' recent inventory figures showed there were about 75,000 units, some 27,000 of which were completed units, or ready-for-occupancy units, worth about P154.4 billion.

"So what developers have been doing is looking for growth opportunities outside of Metro Manila. You have CALABARZON, Central Luzon, Central Visayas, Western Visayas, Davao Region. These regions account for about 90% of total residential real estate loans granted by Philippine banks," Bondoc said.

From an average of 13,000 completed units per year during 2017 to 2019 in Metro Manila, Colliers said this would drop to an average of about 8,000 units between 2024 and 2026, with 2026 seeing the lowest at 5,300 units.

"The trend right now, the norm that we are seeing, is that developers are launching golf courses that are complementing resort-themed developments and even residential lot-only and house and lot developments," Bondoc said.

He said master-planned communities being developed outside Metro Manila will further drive the Philippine property market.

"Still, the office sector is likely to see the highest office vacancy in Metro Manila in 2024 because of the POGO exodus. But there are opportunities, and these are supported by the countryside developments that we are seeing right now," he said.