Businesses are keeping their office footprints unchanged, prospective homebuyers are delaying purchases, and consumers are cutting back on mall visits as geopolitical uncertainty and higher costs weigh on sentiment, according to property consultancy Colliers Philippines.

In its Q1 2026 Survey Flash Report released last Wednesday, June 24, Colliers said the Philippine property market remains in transition, with office attendance strengthening even as occupiers, residential buyers, and retailers adopt a more cautious stance.

“Return-to-office (RTO) is back in command, but market confidence remains fragile,” Colliers said.

The survey showed that traditional office setups remain the dominant workplace arrangement, with 50 percent of respondents reporting a full RTO setup. While this was lower than the 57 percent recorded in the second quarter of 2025, hybrid work arrangements rose to 44 percent from 40 percent previously, while six percent remained fully work-from-home (WFH).

Colliers said the results reinforce the importance of well-designed physical workplaces in encouraging employees to return to the office.

The consultancy added that declining vacancies in major business hubs such as Makati City central business district (CBD), Fort Bonifacio, and Ortigas Center make it an opportune time for developers to intensify the marketing of sustainable as well as high-quality office towers located along the peripheries of key CBDs.

Despite stronger office attendance, most occupiers are not planning significant changes to their workplace footprint.

About 67 percent of respondents said they plan to maintain the status quo for the remainder of the year, while 19 percent expect to rightsize, and 14 percent intend to expand their office footprint.

Colliers said landlords should consider refurbishing older office stock to remain competitive, while occupiers should adopt long-term office-space planning to better manage risks arising from geopolitical and economic uncertainty.

In the residential sector, the survey found that the Middle East conflict and concerns over rising mortgage rates are causing many buyers to postpone purchases.

About 65 percent of respondents said they are holding off residential purchases because of the Middle East crisis and the potential spike in mortgage rates, while 35 percent said they are not delaying purchases.

Colliers identified rising inflation, potential interest-rate hikes, still-elevated mortgage rates, uncertainty over overseas Filipino worker (OFW) remittances, and surging construction-material prices as among the factors that could disrupt the residential market.

Among respondents planning a residential investment, condominium units in major CBDs and lot-only investments in the provinces were tied as the most preferred options at 33 percent each. House-and-lot projects in north or south Luzon accounted for 26 percent, while beachfront properties represented eight percent.

The consultancy said developers should continue highlighting attractive locations, premium amenities, and capital appreciation potential while introducing more innovative sales promotions to help reduce inventory.

As of the first quarter of 2026, Metro Manila had 78,600 remaining condominium units in inventory, of which 27,900 were ready for occupancy. Rent-to-own schemes with free parking were identified as the most attractive ready-for-occupancy (RFO) promotion by 42 percent of respondents, followed by a 60-percent discount on total contract price for spot cash payments at 25 percent.

In retail, higher transportation costs are beginning to affect consumer behavior.

About 60 percent of respondents said they had limited their trips to malls over the past quarter due to higher oil prices, while 40 percent said they had not.

Colliers expects mall foot traffic to ease slightly for the remainder of 2026 as elevated transportation and commuting costs continue to weigh on consumer visits. To sustain traffic, the consultancy recommended that developers invest more aggressively in immersive and experiential concepts, including wellness facilities, hybrid libraries, pickleball courts, as well as sip-and-shop offerings.

The survey also highlighted the growing importance of omnichannel retailing. Consumers continue to prefer purchasing groceries in physical stores, while clothing and footwear as well as beauty and body care products are more commonly bought through online platforms.

“Mall operators and retailers should work hand in hand in improving the omnichannel shopping experience of their consumers,” Colliers said.

“The market is not in retreat—it is in transition. Clear winners here will be those who act early, invest smartly, and design for resilience in an increasingly challenging environment,” it added.