Despite the uncertainties brought by the Middle East oil crisis, the real estate market continues to achieve positive developments, according to the latest report by the Lobien Realty Group.

“Real estate as a sector grew 6.8 percent year-on-year in the first quarter despite the headwinds—that's one of the clearest signs that demand fundamentals remain intact,” said Sheila Lobien, CEO of Lobien Realty Group.

In the first quarter of 2026, nationwide residential prices rose 4.5 percent year-on-year and 5.6 percent quarter-on-quarter, showing the residential property market’s price resiliency. However, it is very sensitive to the overall economy, mortgage rates, and even inflation.

The Greater Metro Area (GMA), covering CALABARZON, Central Luzon, and nearby provinces, has become the main driver of demand as the loan grant share is maintained at 40 percent, with 34 percent for residential houses and 6 percent for condominiums. In comparison, NCR figures have gone down to 29 percent, 26 percent for residential houses, and three percent for condominium units. It was reported that prices in GMA are 57 percent lower for houses and 32 percent lower for condos, resulting in outward migration from NCR zones toward horizontal properties in nearby provinces.

In NCR, developers are also recalibrating to address the unsold inventory, especially in condo units. But at the same time, prices have increased by 3.7 percent year-on-year and 13.2 percent quarter-on-quarter, indicating price resilience and steady demand, as evidenced by maintained loans granted. There is also the risk of the Iran war negatively impacting the 15 percent of OFW remittances coming from the Middle East, which can affect the recovery of the condominium market.

In Metro Manila’s office market, the IT-BPM sector continues to be the primary driver, with its increased share from 43 percent in 2025 to 52 percent in the first quarter of 2026. However, office vacancy remains at 19 percent in the first half of 2026, with average rents marginally increasing to P1,000 per sqm. New office supply remains disciplined, with only about 700,000 sqm expected between 2026 and 2029, as developers prioritize stabilizing current vacancy levels before launching major new products.

While premier regional hubs like Cebu, Davao, and Pampanga remain highly sought-after, demand for active BPO and IT-BPM is shifting toward the Department of Information and Communications Technology (DICT)-designated digital cities. These emerging hubs offer competitive setups, tax incentives, and highly capable provincial talent pools.

"As of 2026, there are 25 digital cities, as declared by DICT. In the provincial office sector, decongestion, decentralization, and rating opportunities outside the capital region are among key trends,” said Alex Regala, Director of Sales and Strategic Partnerships of LRG.

With the P9.6 trillion national infrastructure plan, major road projects like the Luzon Spine Expressway Network are significantly easing transport delays between regions, making the provinces much easier to reach and more affordable for businesses.

“Decentralizing outside Metro Manila is now a permanent BPO strategy driven by lower provincial rents and living expenses that boost profit margins,” added Regala.

Warehouse and logistics investments continue to expand beyond Metro Manila, driven by infrastructure projects, e-commerce growth, and supply chain modernization.

“Philippine e-commerce users are projected to increase to 17 million this year, up from three million last year. As online shopping continues to grow, businesses are investing in smart and modern warehouses to improve efficiency and enable faster delivery times," said Steph Ng, associate director of LRG.

Cavite, Laguna, and Batangas remain the most active corridors for occupier demand, while Clark and Central Luzon are emerging as the country’s fastest-growing logistics hubs, aided by lower land costs, international airport access, and expressway connectivity.

While growth is mainly driven by the e-commerce, logistics, and manufacturing sectors, the report stressed that location defines long-term value: sites with expressway access, industrial zoning, and proximity to ports or airports command the strongest demand in the warehouse market.