Participation
of Overseas Filipino Workers (OFWs)
in Philippine condominium investment has softened materially as they are
shifting to offshore condominium
markets.
PRIME Philippines recently
presented a 10-year property market review and multi-year projections
during the 2026 Annual Outlook and Media Briefing at Grand Hyatt.
PRIME Philippines is the
fastest growing real estate service company in the country consistently
providing effective integrated real estate solutions to developers, investors,
occupiers, land bankers, and other clients.
PRIME reported that
residential condos are now end-user led, not investor-driven.
Investor demand has softened
due to compressed rental yields, muted capital appreciation over recent years,
and heavy taxes imposed on transactions which structurally weaken condo
investment returns.
Inflated zonal values ranging
from 20-30% have increased transaction
costs through inflating taxes and fee bases.
For ordinary assets used to generate income ,
taxation erodes roughly 36% of revenue,
30% of which are government taxes.
The usual costs include Value Added Tax (17%), Capital Gains Tax
(8%), Broker’s Commission (4%), Documentary Stamp Tax (2%), Association Dues
(2%), Real Property Tax (2%), Transfer Tax & Registration Fee (1%).
Higher interest rates weaken borrowing
capacity and reduces mortgage
affordability for end-users.
PRIME noted that an estimated 2 in 5 OFWs who previously
bought in the Philippines are now allocating to offshore condominium markets.
From a pricing perspective, upper-mid condominiums in central Dubai is also
reported to be comparable to uppermid Metro Manila proper.
Rental yields have also
shrunk. With yields ranging 5-10% pre-pandemic, the current state is now at
2-4%, more aligned with global standards.
PRIME noted in its 2025
reselling radar that 15-20% were sold at
a loss, 30-40% as “break-even”, 5% with
more than 10% returns while the rest “
on hold”.
Buyers increasingly favored
house-and-lot living over high-density condominium formats, and developers
adapted by launching “new normal” products.
PRIME noted that mid to luxury
condominiums and residential lots posted estimated value declines of 10% to 25%
in 2025.
The more damaging shift was
the deterioration in investor confidence following the flood control scandal,
which depressed sentiment and prices for luxury assets. As a result,
discounting became more aggressive, with developers offering 20–30% discounts.
PRIME suggested proper actions
to address the several issues confronting the real estate industry: (a)
realignment of zonal values for the “interest cut cycle”; (b) reduce taxation redundancy for the “weak economic growth”; (c ) encourage longer mortgages for declining investor confidence and (d) first-time home buyer incentive for
declining asset values
According to an Asian Development Bank study
conducted in 2023, approximately 27.1% of remittances go into savings or
investments, 72.7% of which are allocated towards real estate.
OFWs often buy homes for their
families back home or as investments for their future. For many Filipino
families, owning a home is a top priority, and OFWs play a crucial role in
making that dream a reality.
In 2020, cash remittances
experienced a minor 0.76% decline due to the pandemic, dropping from $30.13
billion in 2019 to $29.9 billion.
In 2021, there was strong recovery with a 5.1% year-on-year
growth to $31.4 billion, driven by the reopening of global economies.
In 2022-2023, continued growth
driven by land-based and sea-based workers with US$32. 539 billion in 2022.
In 2024, total personal remittances hit a record high
of $38.34 billion, a 3% increase from 2023, representing 8.3% of the country's
GDP.
As of November 2025 , the BSP
data showed personal remittances of $35.73 Billion.
In terms of 2024 total remittances amounting to $34,492,616,000, the
sea-based sector sent home $6,941,085,000, or almost 20 percent, while the
land-based sector sent home $27,551,532,000.
BSP records showed that he
sea-based sector’s remittances (in thousand US dollars) for the past 20 years:
$1,669,358 in 2005; $1,949,290 in 2006; $2,236,363 in 2007; US$3,034,553 in
2008; US$3,400,412 in 2009; $3,806,108 in 2010; $4,340,416 in 2011; $4,835,342
in 2012; $5,215,378 in 2013; $5,575,722 in 2014; $5,572,148 in 2015; $5,792,459
in 2016, US$6,870,827 in 2017; $6,139,512 in 2018; $6,539,246 in 2019; $6,353,522 in 2020; $6,545,002 in
2021; $6,715,880 in 2022; $6,852,362 in 2023; and $6,941,085 in 2024.
Remittances are a major source
of foreign currency for the Philippines. This inflow of foreign currency helps
support the value of the Philippine Peso, which is important for real estate
investors who are looking to purchase property in the country.
(Atty. Dennis R. Gorecho heads
the Seafarers’ Division of the Sapalo Velez Bundang Bulilan Law Offices. For
comments, e-mail info@sapalovelez.com, or call 0908-8665786.)
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