Metro Manila’s condo market is navigating a wave of oversupply that has caught the attention of real estate experts, investors, and homebuyers alike. While the skyline continues to rise, sales have not kept pace, raising questions about long-term demand, property values, and the potential opportunities this situation may offer—particularly for first-time buyers and foreign investors.
The Scope of the Oversupply: 38 Months or 8.2 Years?
Recent reports have revealed conflicting figures about the severity of the oversupply in Metro Manila’s condominium market. According to a report by GMA Network, the current inventory level equates to 38 months’ worth of unsold units—a figure that already indicates market saturation. However, Colliers Philippines, a leading property consultancy, paints a grimmer picture, estimating that it could take as long as 8.2 years to absorb the existing inventory at current sales velocities.
This mismatch in data may stem from different interpretations of absorption rates and geographic definitions, but both metrics highlight a common reality: supply is outpacing demand, and the condo market is under pressure.
What Caused the Metro Manila Condo Oversupply?
Several converging factors have led to this glut of units in Metro Manila:
1. Pandemic-Era Construction Momentum
Many developers doubled down on high-rise residential construction during the COVID-19 pandemic, expecting a swift economic rebound and pent-up housing demand. However, the actual recovery, while ongoing, has not matched those optimistic projections.
During the COVID-19 pandemic, developers continued launching high-rise residential projects, anticipating a swift economic rebound and sustained housing demand. For instance, DMCI Homes launched Alder Residences in Taguig City in August 2020 and delivered its first building on schedule by mid-2024. This underscores the industry’s commitment to ongoing development despite pandemic challenges.
However, the anticipated rapid recovery did not fully materialize. By early 2025, new condominium launches in Metro Manila had dropped to a five-year low, with a 77% decline in the first quarter compared to the previous quarter. Leechiu Property Consultants attributed this slowdown to developers focusing on selling existing inventory amid cautious market sentiment.
2. Exit of POGOs
A major blow came from the exit of Philippine Offshore Gaming Operators (POGOs), many of which had driven demand for both residential and commercial space prior to recent bans and crackdowns. Their departure, spurred by stricter regulations and geopolitical tensions, left thousands of units unrented or unsold in key areas like Makati, Taguig, and Pasay.
The Philippine Offshore Gaming Operators (POGOs) significantly influenced Metro Manila’s real estate market, occupying substantial office spaces. At their peak in 2019, POGOs rented approximately 1.3 million square meters of office space. However, their presence dwindled to about 3.5% of total office stock by mid-2024.
The government’s decision to ban POGOs by the end of 2024 led to increased vacancies, particularly in areas like the Bay Area and Makati Fringe, where vacancy rates were projected to rise significantly. This exodus left numerous residential and commercial units unrented or unsold, exacerbating the oversupply issue in key districts.
3. Changing Buyer Profiles
The condo market has witnessed a shift in buyer demographics. Previously driven by speculative investors, the market now sees more end-users and first-time homebuyers, influenced by rising interest rates and economic uncertainties. Leechiu Property Consultants reported that developers are now focusing on marketing existing inventory, particularly within the midrange segment, before launching new projects.
Additionally, the oversupply has prompted developers to offer incentives like discounts and extended payment terms to attract buyers, reflecting the market’s adaptation to the evolving buyer landscape.
Will Metro Manila Condo Prices Drop Significantly?
Despite the oversupply, Metro Manila has not yet seen dramatic price collapses. According to the Philippine Daily Inquirer, the market remains “resilient and adaptable”, with developers offering flexible payment schemes, longer amortization terms, and aggressive promotions rather than outright markdowns.
However, price stagnation is evident. Some mid-range developments have implemented subtle price corrections or introduced bundled incentives—such as waived reservation fees, extended down payment terms, and even free appliances—to maintain perceived property values while attracting cautious buyers. As Business Inquirer suggests, this creates a “blessing in disguise” for first-time homebuyers, who now enjoy greater negotiating power and a wider pool of listings.
A crucial, often overlooked factor behind the price stability is the corporate structure of many top developers in the Philippines. Several of the country’s largest real estate firms are part of conglomerates that also own banks, allowing them to finance projects internally or offer preferential mortgage terms through their own financial institutions. This vertical integration reduces financial pressure and gives developers more flexibility to “wait it out” rather than lower prices to clear inventory. It effectively cushions them from liquidity concerns that might otherwise force discount-driven fire sales, as seen in less capitalized markets.
As a result, while buyers may hope for significant price drops, what’s more likely is a prolonged period of sluggish sales and creative financing solutions, rather than a market-wide crash. For investors and homebuyers, this means the best “deals” may come not through lower prices—but through favorable terms and value-added incentives.
How This Affects First-Time and Foreign Buyers
The current environment offers a rare window of opportunity for first-time homebuyers in Metro Manila. With developers eager to offload inventory and maintain cash flow, many are rolling out flexible financing options, longer payment terms, and attractive incentives tailored to end-users rather than speculative investors.
For foreign investors, the dynamics differ but remain favorable. As outlined in our guide, How to Buy Property in The Philippines as a Foreign National, foreigners are permitted to own up to 40% of the units in any condominium project.
Foreign buyers typically reserve units directly from developers rather than participate in the more competitive secondary market that local buyers often navigate. These purchases commonly follow developer-led payment schemes, with monthly amortizations spread over 24, 36, 48, or even 60 months. The remaining balance is then settled through either cash payment or bank financing.
In today’s oversupplied market, developers are more open to extended payment terms, lower reservation fees, and promotional inclusions—making it easier for foreign buyers to enter the market with more flexibility and less financial pressure than in previous years.
Comparison: Bangkok’s Condo Crisis Offers a Cautionary Parallel
Metro Manila’s condo oversupply mirrors challenges faced in other Southeast Asian capitals. In Bangkok, a surplus of condominiums, coupled with declining buyer confidence due to recent seismic activities, has led to market stagnation. As detailed in our article, Bangkok’s Condo Market Faces Crisis Amid Oversupply and Quake, the Thai capital grapples with both an excess of units and heightened earthquake fears.
While Metro Manila hasn’t recently experienced a major earthquake, it sits atop the Pacific Ring of Fire and is intersected by several active fault lines, notably the West Valley Fault (WVF). This fault runs through densely populated areas, including Quezon City, Marikina, Pasig, Taguig, and Muntinlupa. The Philippine Institute of Volcanology and Seismology (PHIVOLCS) warns that a magnitude 7.2 earthquake along the WVF—commonly referred to as “The Big One”—could result in catastrophic damage.
Projections estimate that such an event could lead to approximately 51,500 fatalities, with 33,500 directly from the quake and an additional 18,000 from subsequent fires. Moreover, around 12% of residential buildings in Metro Manila could sustain heavy damage, with high-rise structures particularly at risk.
The last significant movement of the WVF occurred in 1658, suggesting that stress has been accumulating for over 360 years. Given that major earthquakes along this fault recur every 400 to 600 years, experts believe that another significant event could occur within our generation.
This looming threat underscores the importance of proactive measures in urban planning and real estate development. Ignoring the oversupply, especially in seismically vulnerable regions, could exacerbate risks. Strategies such as enhancing structural resilience, diversifying unit types, shifting to rental-focused models, and incentivizing foreign ownership are essential to bolster the market’s resilience and ensure long-term stability.
Who Are Still Buying Metro Manila Condos?
Despite the oversupply in Metro Manila’s condominium market, certain buyer segments continue to purchase:
1. End-Users Seeking Primary Residences
Young professionals and families belonging to the high income bracket are actively purchasing condos, especially those located near major business districts. The convenience of living close to work, schools, and essential services makes condominiums an attractive option. Additionally, the availability of flexible payment terms and promotional offers from developers has made home ownership more accessible to this group.
2. Overseas Filipino Workers (OFWs) Investing for the Future
OFWs remain a significant force in the condo market, viewing real estate as a stable investment and a means to secure housing for their families. The potential for property value appreciation and rental income makes condominiums a preferred choice for many OFWs. Another factor condominiums are favored among OFWs is that they require less maintenance than a house and lot.
3. Foreign Investors Targeting Strategic Locations
Foreign investors are showing increased interest in Metro Manila real estate, particularly in areas with strong economic growth and infrastructure development. The Philippines’ developing economy, favorable investment climate, and ongoing transport projects make it an appealing destination for international buyers.
4. Buyers Prioritizing Connectivity
With Metro Manila’s traffic congestion, proximity to transportation hubs has become a top priority. Properties near current and upcoming transit lines, such as the Metro Manila Subway and the North-South Commuter Railway, are in high demand. Living close to these hubs reduces commute times and enhances daily convenience.
What Developers and Policymakers Can Do
1. Limit New Launches in Saturated Districts
Developers should exercise caution in launching new projects in oversupplied areas such as Pasay, Parañaque, and Muntinlupa, where vacancy rates are rising. According to Colliers Philippines, developers need to “turn off the supply tap” to prevent further flooding the market.
2. Repurpose Unsold Inventory
To reduce vacancy, unsold condo units can be repurposed into rental units, co-living spaces, or even tourist accommodations. This strategy helps adapt to changing demand patterns while minimizing long-term inventory risks.
3. Promote Ownership Through Government-Backed Financing
High transaction costs and tight credit access remain a barrier for many domestic would-be buyers. Offering government-backed mortgage programs, tax incentives, and longer repayment terms can encourage end-user demand and reduce reliance on speculative buying.
4. Ease Restrictions on Foreign Ownership
Currently, foreigners can only own up to 40% of a condominium building’s units. Easing this restriction—even partially—could unlock new demand from international investors and strengthen capital inflows into the sector. This is already a subject of ongoing policy discussions.
These interventions are necessary not just to stimulate sales but to prevent long-term vacancy problems that could affect urban planning, infrastructure, and even security in high-rise communities.
Looking Ahead: Navigating a Cautious and Shifting Market
The Metro Manila condo oversupply underscores a complex reality rather than a clear-cut opportunity. While the market is far from collapsing, the persistent glut of inventory is a sign that developers must recalibrate their strategies—focusing more on market fit, location-driven projects, and long-term sustainability rather than volume-driven launches.
For real estate professionals, this means a shift toward repurposing unsold units, managing delivery schedules more conservatively, and closely monitoring buyer sentiment. Conglomerate-backed developers, who also control the financing arms of their businesses, appear well-positioned to weather the slowdown without resorting to steep price cuts, which may further slow the timeline for price adjustments.
As for buyers, especially first-time homeowners and overseas Filipino workers, the current environment offers greater bargaining power, but not necessarily bargain prices. Developers are prioritizing flexible terms and added-value incentives over discounts. For foreign investors, the legal framework remains a hurdle, though discussions about easing foreign ownership restrictions could open future opportunities.
One clear trend that continues to define buyer behavior is the importance of location and connectivity. Projects near transport hubs, subway lines, and mixed-use infrastructure remain relatively resilient—reinforcing the old real estate adage: location still matters most.
Ultimately, while the road to market equilibrium may be long, the sector is unlikely to reverse course dramatically. Cautious optimism, informed purchasing, and adaptive development planning will define how stakeholders move forward in the coming years.
