Manila Condo Market Faces Oversupply and Repricing Challenges in 2026
Gulf News
Manila's condo market sees growing unsold inventory amid a mismatch in supply and demand, signaling a multi-year market repricing and opportunities for strategic buyers.
Manila’s Condo Market Paradox: Oversupply Amid High Housing Demand
Entering 2026, Metro Manila’s condominium sector presents a unique paradox. Despite an urgent housing need for millions, the city has a significant glut of unsold condo units. This contradiction stems not from a lack of construction but rather a disconnect between the type, price, and location of available units and the affordability of many residents.
Rising Unsold Inventory and Vacancy Rates
According to Colliers, an industry report at the end of 2025 showed 79,200 unsold condo units across Metro Manila. This figure has since grown to approximately 82,900 units as of August 2026, highlighting a worsening oversupply issue. Residential vacancy rates hovered around 24.7% at the end of 2025, expected to stay near 25% through 2026 before easing slightly to around 23.9% in 2027.
Developers sold about 10,100 pre-selling and ready-for-occupancy (RFO) units in 2025, marking an 8% increase over the previous year. While market conditions have improved from mid-2025, with inventory supply dropping from a staggering 13.4 years to about 8 years by the end of the year, nearly 30,000 RFO units remain unsold — signaling that supply still outpaces demand.
The Buyers’ Market and Price Adjustments
Industry expert Bertalan Feher emphasizes that Manila's real estate environment currently favors buyers. Developers are offering discounts, extended payment plans, and other incentives to attract end-users. Colliers notes that aggressive RFO promotions significantly contributed to increased sales in 2025.
Importantly, mid-income buyers represent the bulk of demand, accounting for 77% of new condo take-up in Q3 2025. This suggests a genuine appetite for reasonably priced condominiums in accessible locations, dispelling notions that condos lack appeal to everyday Filipinos.
Location and Affordability Are Critical
The core issue lies in developers building units that do not match the affordability or location preferences of potential buyers. For example, prices around ₱4 to ₱6 million remain out of reach for many middle-income families, despite being considered affordable compared to luxury condos.
Additionally, vacancy rates vary widely by location. The Bay Area experienced vacancies exceeding 50% in 2025, whereas premium areas like Makati CBD, Rockwell Center, and Ortigas Center maintained lower than 15%. This uneven distribution underscores that the Manila condo market is not a single entity but multiple submarkets where location is paramount.
Market Trends and Outlook
After years of speculation, particularly linked to POGO (Philippine Offshore Gaming Operators) demand, the market is slowly correcting. Rental rates fell following the POGO exodus, and landlords now face intense tenant competition. Colliers projects vacancy to peak in 2026, then gradually decline by 2027.
The trajectory foresees 2025 as an inventory correction year, 2026 with continued discounts and absorption, and 2027 onwards potentially marking a healthier supply-demand balance. Developers are responding by scaling back new Metro Manila launches, diversifying into other geographic areas, and targeting niche residential markets.
Approximately 13,000 new condo units are expected in 2026, concentrated mainly along the C5 Corridor, where infrastructure and job growth could support demand. However, excessive additions to an already oversupplied market may intensify competition further.
Divergence Between Luxury and Mid-Market Segments
Interestingly, the luxury and ultra-luxury condominium niche has shown stronger demand and fewer inventory issues. Wealthier buyers, less reliant on mortgages and motivated by lifestyle or wealth preservation, maintain stability in this segment.
This divergence suggests a future 'barbell-shaped' market: strong demand in affordable/mid-income and luxury segments, with the generic middle segment more vulnerable to market pressures.
Conclusion: What This Means for Real Estate Agents
Manila's condominium sector is undergoing a necessary repricing and shift from speculative growth to fundamentals: location, affordability, connectivity, and livability. Agents should guide clients toward quality projects in well-connected areas while cautious about generic units in oversupplied districts.
Buyers with patience and strategic negotiation leverage will find opportunities in this evolving market. The next boom, if it occurs, will likely be more selective and driven by genuine demand rather than speculation, reshaping Manila's urban housing landscape for years to come.
Based on reporting from Gulf News. Summary and analysis by Propilot AI.
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