On January 30, 2025, the John Clements office hosted its 3rd Industry Briefing Session, featuring real estate experts David Leechiu, CEO of Leechiu Properties, and Prim Nolido, President of Pueblo de Oro. The session provided a comprehensive overview of the real estate landscape in the Philippines, highlighting key economic indicators, market trends, and future projections.
Economic Outlook and Interest Rate Policies
The Bangko Sentral ng Pilipinas (BSP) continues its gradual easing strategy, having reduced the policy rate by 25 basis points during its December 19, 2024 meeting. By the end of 2025, rates are expected to decline further to around 4.75%–5%. This move is anticipated to boost economic growth while maintaining price stability. Despite a slight increase in inflation from 2.3% to 2.5%, it remains within the BSP’s target range. Lower interest rates are expected to increase market confidence, prompting developers to launch more projects and encouraging investors to capitalize on reduced funding costs.
Real Estate Market Trends and Performance
The Philippine property market remains one of the strongest globally, with 1.1 million square meters of new leasing activity. While other markets, such as New York and San Francisco, face contraction and high vacancy rates, the local office sector remains resilient. In contrast, the mid-market segment (PHP 3M to PHP 20M) in Metro Manila has seen a decline, with rental prices in some areas dropping by up to 50%.
Despite challenges in the mid-market, the high-end segment remains robust due to limited supply and strong demand. Office space demand remains healthy, with favorable payment terms, such as rent-to-own options, becoming increasingly available. The primary buyers in the market include overseas remittances, BPO firms, tourism, and domestic consumption.
Impact of POGO Ban and Office Space Demand
The ban on POGOs has led to 1,000 vacant units, particularly affecting areas with a high concentration of these businesses. However, office space demand remains strong, with an additional 1 million square meters of demand projected. Government demand for office space has reached a seven-year high, with the IT-BPM sector driving 266,000 square meters of live requirements.
Tourism and Hospitality Sector Growth
Tourism is poised to be a significant driver of economic growth, with a goal of reaching $30 billion by 2030. South Korea remains the top source of foreign visitors, accounting for 26.3% of total arrivals. The total number of foreign tourist arrivals for 2024 reached 5.9 million, marking a 9.15% year-on-year growth. In 2025, Metro Manila is expected to lead hotel openings, contributing 38% of new keys. Luzon will account for 55% of new accommodations, with a focus on upper midscale and midscale hotels.
Provincial Real Estate Expansion
Prim Nolido of Pueblo de Oro emphasized the increasing appeal of provincial areas, driven by infrastructure improvements. Key growth areas include Batangas, Pampanga, Zamboanga, and Cagayan de Oro. With enhanced connectivity, more people are considering living outside Metro Manila, supporting countryside development.
Looking Ahead
Despite geopolitical uncertainties, property prices in the Philippines have remained steady. While global markets face volatility, the Philippine real estate sector continues to show resilience. With anticipated further interest rate cuts, steady demand, and infrastructure-driven regional growth, the country’s real estate market remains a compelling investment opportunity.
Explore Real Estate Opportunities with Expert Insights
Stay ahead of the Philippine real estate trends in 2025 with expert insights from John Clements’ industry briefings. Whether you’re an investor, developer, or business leader, understanding market shifts is crucial for making informed decisions.
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