High rates, inflation weigh on PH real estate as new bill targets older condos

MANILA— High borrowing costs, surging inflation, and a weakening peso continue to squeeze the Philippine property market, though a proposed bill targeting aging condominiums could offer a long-term lifeline, an industry research firm said on Thursday.

Leechiu Property Consultants said rising construction costs, firm interest rates, and lagging household incomes have combined to dampen the condo market in major urban centers.

The firm noted that economic growth slowed to a post-pandemic low of 2.3 percent in the second quarter of 2026, while inflation quickened again to 7.2 percent in September. The Bangko Sentral ng Pilipinas (BSP), meanwhile, is expected to hike its benchmark rate again, which was already at 5 percent in August.

“The current slowdown in real estate isn’t a lack of appetite — it’s jammed execution,” said Leechiu Analyst of Investment Sales, Miggy Galvez. 

Amid the economic headwinds, analysts highlight Senate Bill 2420, or the proposed Condominium Redevelopment Act, as a key potential release valve, Leechiu said. The measure seeks to replace unanimous voting rules with tiered thresholds for redeveloping older structures—requiring a simple majority for buildings over 50 years old and two-thirds for those aged 30 to 50 years.

The bill could unlock prime real estate in mature central business districts like Makati City, where 28 percent of buildings are over 30 years old, compared to just 3 percent nationwide.

“The Condominium Redevelopment Act could fundamentally change urban renewal. By lowering the voting threshold for older buildings, we can unlock prime land stuck in aging structures, turning underutilized assets into high-value redevelopment opportunities,” Galvez noted.

Leechiu earlier said that demand for residential condominiums in Metro Manila improved in the third quarter amid aggressive developer discounts and government housing initiatives.