Sheila Lobien: The continuing Iran war — LRG's guide to 2026 real estate

The Philippines enters the second half of 2026 with its real estate industry navigating unusual conditions. Lobien Realty Group breaks down the outlook into three economic scenarios showing how the Iran war could affect the sector for the rest of the year, benchmarked against the IMF's baseline-adverse-severe framework, the World Bank's 3.7 percent growth forecast, and the Asian Development Bank's 2.8 to 4.4 percent range.

LRG's "Worst Case" oil band captured the wartime peak almost exactly in April, while its "Base Case" band matched the trading range during the June ceasefire. A fresh spike above $100 a barrel in mid-July, followed by a sharp retreat, showed the same swing playing out a second time within a single quarter. The June 17 ceasefire memorandum opened a 60-day negotiation window, but the truce collapsed after only about three weeks when fresh strikes and retaliation resumed in early July — by July 24, 13 consecutive nights of strikes had taken place, before a pause took hold around July 25-27 as Iran sought fresh talks with mediators, sending Brent crude down 16 percent over three sessions, its steepest slide in six years.

Given the volatility, LRG assigns roughly 50 percent weight to a "fragile ceasefire" as the most probable and pragmatic scenario. Under this path, office space remains resilient, with Metro Manila rent holding at P1,000 per square meter even as vacancy stays near 19 percent, translating to roughly 500,000 square meters of leasing demand for the year, supported by a conservative supply pipeline of only 640,000 square meters through 2029. Residential real estate continues its recalibration story — NCR condominium prices rose 13.2 percent quarter-on-quarter, even as approved condominium floor area fell sharply, suggesting developers are pulling back on new launches while focusing on selling existing inventory. Balance GMA now accounts for 40 percent of residential loans against NCR's 29 percent, with houses and condos in the Balance GMA 57 and 33 percent cheaper, respectively. The key risk remains that roughly 15 percent of OFW remittances come from the Middle East and are directly exposed to the war. Warehousing will continue growing on the back of the digital economy, though its pace is expected to moderate rather than repeat 2024's near-doubling.

Looking to history for context, the piece draws a parallel to the 1990-1991 Gulf War, when Iraq's invasion of Kuwait doubled oil prices within months before a ceasefire arrived roughly six months later — but real normalization for the US economy didn't arrive until quarters after the price recovery, suggesting real estate could see a softer start to 2027 even after the current war ends.

Ultimately, the piece asks whether the industry can repeat its 2025 performance in 2026 — and argues the evidence says yes. Real estate grew 6.8 percent in the first quarter, adding roughly P26 billion, even as construction contracted and GDP forecasts fell. Matching 2025 would not be a disappointing outcome; it would confirm that an industry tested by the pandemic, the POGO exit, the Russo-Ukrainian war, and now the Iran war can continue absorbing shocks that would flatten less durable sectors — a resilience that, more than any single quarter's number, deserves the headline.

Read the full article here:
https://business.inquirer.net/603461/the-continuing-iran-war-lobien-realty-groups-guide-to-2026-real-estate