SMDC Q4 2025 Earnings: 5 Signals Real Estate Investors Should Watch in 2026

February 26, 2026

SMDC's Q4 earnings (reported under SM Prime's residential “Residences” segment) give investors a practical read on where the mass-market condo cycle stood at the end of 2025—and what that positioning implies for pricing, take-up, and rental strategy in 2026.

The takeaway from the Q4 numbers is not “weak market” across the board. It's a rebalancing: softer revenue recognition and profitability in the quarter, paired with clear signs that developers are managing launches and inventory more cautiously as financing conditions and buyer behavior evolve.

1) Q4 2025 residential revenue fell, showing slower recognition—not zero demand

In Q4 2025, the residential segment posted ₱9.94B revenue, down 32% YoY (from ₱14.62B).

For real estate investors, this matters because revenue reflects what is recognized based on construction progress and turnover schedules—not just new buyer interest. In a market with shifting affordability and buyer selectivity, recognition can lag even if inquiries and reservations remain active.

What to watch next

Look for whether 2026 quarters show stabilizing YoY revenue declines as project completions and turn-overs normalize.

2) Profitability compressed sharply—signal to prioritize value and absorption

Q4 2025 EBIT for residences was ₱3.66B, down 47% YoY, with EBITDA also down 47% YoY.

Margin pressure typically implies one (or more) of the following:

• a different project mix (more promos/value products),

• higher costs,

• softer pricing power, or

• more competition in certain submarkets.

Investor implication

In 2026, focus on assets with defensible tenant demand (transport-linked locations, employment hubs, strong amenities) rather than relying purely on appreciation narratives.

3) Reservation sales dipped, confirming a more selective buyer

Reservation sales in Q4 2025 were ₱8.25B, down 17% YoY. Full-year 2025 reservations were ₱48.92B, down 22% YoY.

This is a classic late-cycle signal: buyers remain present, but they're more price-sensitive and more likely to compare options (including RFO/secondary listings).

What “selective” demand looks like in practice

• smaller cuts (studios/1BR) that fit monthly budgets,

• more emphasis on “move-in ready” and practical layouts,

• preference for projects near rail/road connectivity and daily essentials.

4) Launch volume was sharply reduced—developers are controlling supply

Units launched in Q4 2025 were 111, down 84% YoY (from 707).

A steep launch slowdown is often a discipline move: developers pull back new supply when they want to protect absorption and pricing, and when they're prioritizing clearing existing inventory.

Why this matters for investors

Reduced launches can help limit future oversupply in specific pockets—supporting resale pricing and rent stability where end-user demand is steady.

5) Inventory rose—making “unit selection” the key advantage in 2026

Reported inventory (units) for Q4 2025 was 731, up from 96 a year earlier.

Rising inventory is not automatically bearish. For buyers and investors, it can be an opportunity—because selection improves and negotiations become more realistic, especially on:

• higher floors/less preferred orientations,

• older launch batches,

• units competing directly with nearby RFO supply.

Practical 2026 playbook

• Negotiate based on comparable RFO and secondary listings.

• Prioritize units with stronger leasing fundamentals (walkability, transport access, employer density).

• Underwrite conservatively: assume longer vacancy periods and normalize rent growth.

Macro lens: easing rates can improve affordability, but timing matters

BSP policy easing through late 2025 set a friendlier affordability backdrop going into 2026. At the same time, the broader housing market still showed price momentum in 2025 (e.g., BSP's residential price index release).

For SMDC-focused investors, the best question for 2026 is: Will lower financing friction translate into faster reservation velocity—or mainly support refinancing and secondary transactions first?

Closing outlook: what SMDC's Q4 2025 earnings suggest for 2026

SMDC's Q4 2025 earnings point to a market that is cooling in revenue recognition and profitability, while developers manage launch pacing and inventory more actively. The opportunity in 2026 is not “buy anything and wait”—it's buying the right unit in the right micro-location, with rental demand that can carry the holding period.

If 2026 brings steadier macro conditions and improving affordability, the upside will likely concentrate in projects that are well-connected, competitively priced, and easy to lease—the exact profile that tends to outperform when buyers become selective.

Sources

1. SM Prime Holdings – 4Q/FY 2025 Investor Briefing Deck (PDF): https://www.smprime.com/wp-content/uploads/2026/02/4Q_FY2025_IR-Deck_FINAL16Feb2026_FINAL.pdf 

2. SM Prime Holdings – “SM Prime Net Income Hits P48.8B in 2025” (Company Release): https://www.smprime.com/company_releases/sm-prime-net-income-hits-p48-8b-in-2025/ 

3. Bangko Sentral ng Pilipinas (BSP) – Monetary Policy Decisions: https://www.bsp.gov.ph/SitePages/PriceStability/MonetaryPolicyDecision.aspx 

4. BSP – Residential Property Price Index (Media Release): https://www.bsp.gov.ph/SitePages/MediaAndResearch/MediaDisp.aspx?ItemId=7684&MType=MediaReleases 

5. Reuters – BSP rate cut (Aug 28, 2025): https://www.reuters.com/world/asia-pacific/philippine-central-bank-cuts-benchmark-rate-by-25-basis-points-2025-08-28/