The Metro Manila condominium market continues to navigate through challenges, with an oversupply of ready-for-occupancy (RFO) units taking an estimated eight years to fully absorb. However, not all submarkets are affected equally. Developers are stepping up with more attractive payment schemes, and upcoming interest rate cuts could provide a much-needed boost to demand.

Key Market Insights

• Condo Oversupply & Payment Flexibility
  Metro Manila currently has 26,300 unsold RFO units. To address this, developers are offering enticing promos such as extended down payments, spot cash discounts, and even rent-to-own schemes. Some are also including free appliances to attract buyers.
• Interest Rate Cuts as a Catalyst
  Lower mortgage rates from anticipated interest rate cuts may help spur demand, complementing developer-led promos. This is expected to positively impact mid-income buyers looking for financing options.
• Growth Beyond Metro Manila
  Demand for resort-style and mid-income vertical projects outside the capital is on the rise. Cebu, Batangas, Benguet, and Davao are leading the way with strong sales, signaling the importance of geographic diversification for developers.
• Upcoming Infrastructure as a Demand Driver
  With major infrastructure projects, including the Metro Manila Subway, set for completion in the coming years, developers should highlight proximity to these game-changing developments to boost property values and demand.

Market Challenges & Strategies for Developers

• High Vacancy Rates
  The market saw an all-time high vacancy rate of 23.9% in 2024, largely due to the POGO (Philippine Offshore Gaming Operators) exodus. This trend is likely to continue in 2025, with developers needing to explore alternative leasing models to support investors and mitigate rental market slowdowns.
• Leisure & Condotel Investment Boom
  The growing interest in leisure-oriented real estate presents a new avenue for investment. Condotels in tourist destinations such as Palawan, Bohol, and Samal are gaining traction, offering investors a chance to earn rental income while catering to business and leisure travelers.
• Strategic Expansion to Suburban Areas
  Developers are increasingly looking beyond Metro Manila. Companies like Cebu Landmasters and DMCI Homes are investing in new residential projects in Luzon and VisMin, aiming to capture demand in fast-growing suburban markets.

Looking Ahead

While Metro Manila faces an oversupply issue, the property sector is far from stagnant. Developers are adapting with better payment schemes, interest rate cuts are on the horizon, and infrastructure developments are set to reshape the market. Moreover, demand remains strong for upscale and luxury units in key business hubs.

The shift toward geographic diversification and alternative investment models will define the next phase of real estate growth in the Philippines. For investors and homebuyers, this period presents unique opportunities—whether in Metro Manila or beyond.

Source: https://www.colliers.com/en-ph/research/colliers-quarterly-property-market-report-residential-q4-2024-philippines