Beyond supply glut, Manila condo market faces 'repricing': The numbers that matter

Manila: The condominium market here entered 2026 with a paradox: a huge housing need exists while Metro Manila simultaneously has a condo glut.

It's a strange housing market feature: the Philippine capital as thousands of completed condo units that remain vacant amid a big gap in affordable housing.

The problem of a lack of proper housing for millions of Filipinos is not an engineering one; rather, it's a "disconnect" between supply and demand.

To cut this long story short: There's a "mismatch" between what developers built, where they built it, and who can afford it, say industry trackers.

Now, the condo market that "overheated" due to POGO-driven speculation is showing early signs of "healing".

This healing process, however, is likely to be a multi-year adjustment rather than a quick rebound.

By end-2025, one industry report prepared by Colliers showed 79,200 unsold condo units remained unsold in Manila.

"Actually there are 82,900 unsold condos now so the numbers are growing... and the situation is getting worse," said Bertalan Feher, a Senior Marketing and Communications Consultant who specialises in the real estate, property, and complex international markets.

That last number is particularly important: the market is improving, but supply is still coming.

Feher shares real estate insights and market reports regarding the Philippine property sector, which has earned him a reputation as a prominent industry tracker.

He also collaborates with and promotes findings from major property advisory firms like Leechiu Property Consultants, pointing to trends in residential condos, commercial offices, and tourism-driven real estate demand.

Currently, it's a buyers' market in Manila with discounts, extended payment terms, lower cash requirements, ready-for-occupancy (RFO) incentives being dangled by developers.

Here's what to make sense of what's happening:

For years, Metro Manila's condo market was heavily tilted toward developers. Pre-selling units could be marketed years before completion, with buyers attracted by relatively small reservation fees and installment schemes.

That equation has changed.

Developers are increasingly offering:

Colliers says these aggressive RFO promotions helped drive the improvement in sales during 2025.

For genuine end-users, this is a much better negotiating environment than the boom years.

The recovery isn't evenly distributed.

The mid-income segment accounted for 77% of net take-up in Q3 2025, indicating that there is real demand for reasonably priced housing in accessible locations.

This is significant because it suggests the problem isn't that Filipinos don't want condos.

It's that price matters enormously.

The long-term winners are likely to be condos connected to:

A condo in a genuinely connected neighborhood has a much better chance of retaining tenants and buyers than an interchangeable tower built primarily because the developer had land available.

Easier financing conditions can gradually improve affordability by reducing mortgage costs and encouraging buyers who had been waiting on the sidelines.

Colliers already identified eased mortgage rates as one factor supporting the 2025 recovery. But cheaper financing alone won't solve the oversupply.

The Bay Area is particularly exposed.

Colliers reported vacancy above 50% in the Bay Area during 2025, compared with vacancies below 15% in stronger submarkets such as Makati CBD, Rockwell Center and Ortigas Center.

That tells us something crucial: There isn't one Manila condo market. There are several. Location is becoming much more important.

When that demand disappeared, landlords suddenly had to compete for a much smaller pool of tenants.

Rental rates consequently came under pressure. The Philippine News Agency reported that condo rents declined following the POGO exodus, although the market was beginning to stabilise.

This exposed a fundamental weakness:

Some condos were priced as though exceptional rental demand would last forever.

It didn't.

The Philippine condo model made it relatively easy to purchase during construction and hope that the unit would appreciate before turnover.

That works beautifully in a rising market.

It becomes painful when thousands of owners receive their units at roughly the same time and discover that thousands of other owners are also trying to:

Suddenly, the condo isn't an appreciating asset. It's a competing commodity.

The problem is that vacant condos aren't necessarily affordable to the people who need homes most.

A ₱4-million or ₱6-million studio may be "cheap" compared with a luxury condo, but it can still be unaffordable relative to household income.

So the market has a price mismatch:

People need housing.Developers have housing.But the housing isn't necessarily at the price, location or format people need.

That's why the next phase may involve more than simply waiting for buyers to absorb existing inventory.

Colliers expects vacancy to peak around 2026 before easing in 2027.

That doesn't necessarily mean prices will suddenly surge.

Instead, expect a slow normalization:

2025 → inventory correction
2026 → continued discounts + absorption
2027 onward → potentially healthier supply-demand balance

The market could therefore become healthier without returning to the speculative boom.

The era of launching thousands of similar towers simply because "Metro Manila condos sell" is becoming harder to sustain.

Colliers says developers are already tempering Metro Manila launches, diversifying geographically and exploring niche residential markets.

Expect more attention to:

Colliers expects around 13,000 new condo units in 2026, with roughly one-third of upcoming supply concentrated along the C5 Corridor.

That creates both an opportunity and a risk.

Infrastructure and employment growth can support demand — but putting thousands of additional units into an already oversupplied market can also intensify competition between projects.

Interestingly, the high end of the market has behaved differently.

Colliers noted stronger demand for luxury and ultra-luxury units, while the biggest inventory problems remain concentrated in mid- and lower-income segments.

That's counterintuitive, but wealthy buyers are less dependent on mortgages and are often buying for lifestyle, wealth preservation or diversification rather than rental yield.

The future Manila condo market may therefore become increasingly barbell-shaped: Affordable/mid-market + luxury = stronger
Generic investor-oriented middle = more vulnerable

Manila's condo correction may ultimately be good for the market.

The boom encouraged developers to build aggressively and investors to treat condos almost like stocks: buy early, wait for appreciation and sell.

The correction is forcing the industry back toward fundamentals: location + affordability + livability + rental demand + connectivity.

The next Manila property cycle is unlikely to be about "condos always go up." It will be about which condos deserve to go up.

And that is a much healthier market.

The Manila condo market isn't dead. It's being repriced.

The biggest opportunity is likely to be for end-users and patient investors who can negotiate deeply on quality units in supply-constrained, well-connected locations.

The biggest risk: remains buying a generic unit in an oversupplied district simply because the developer offers a large discount.

The next boom, if it comes, will probably be narrower, more selective and driven by real demand rather than speculation.