Now may be the best time to buy a Manila condo as developers offer discounts.
Makati, Manila: Patrick Balala, 53, a former overseas Filipino worker (OFW) and condominium owner in Makati, Manila’s financial district, had been waiting for a tenant for more than two years for his one-bedroom unit.
No renter came forward during that period.
Now, his property agent has brought welcome news: a long-term tenant has signed a lease for his 27-sqm (290.63 sqft) unit at ₱17,000 per month.
The new tenant also requested furnishings, which were duly provided—reflecting changing demand in the rental market.
Buyers’ market
The condominium market remains firmly in buyers’ territory in 2026, with elevated vacancy rates, tens of thousands of unsold units, and ongoing promotional offers continuing to shape the sector, even as demand shows early signs of recovery.
Industry trackers note that the Manila condominium market is still considered a “buyer’s market”, with developers expected to maintain promotional pricing and flexible financing options to stimulate sales.
Leechiu Property Consultants said that while the market is gradually emerging from its deepest post-pandemic downturn, a full recovery is expected to take time.
A recent report notes that developers are still working through a substantial inventory of completed units while adjusting to higher financing costs and shifting buyer preferences.
Key factors driving oversupply
The oversupply has been attributed to a combination of factors, including:
- The pandemic-era market slowdown
- The exit of many Philippine Offshore Gaming Operators (POGOs)
- Elevated interest rates in recent years
- A surge in condominium completions that outpaced demand
According to Colliers Philippines, Metro Manila is projected to record a residential vacancy rate of 25.6% by end-2026, up from 24.7% in 2025, as nearly 13,000 condominium units are expected to be completed this year.
Around 30,000 ready-for-occupancy condominium units in Manila are estimated to remain unoccupied, according to Colliers, underscoring how supply continues to outstrip demand despite improving sales activity.
While market conditions remain challenging, there are early signs of stabilisation.
Colliers reported that net condominium take-up in the first quarter of 2026 rose to about 2,000 units—around ten times higher than the same period a year earlier.
Unsold inventory has also started to decline from its peak, suggesting that developers’ aggressive discounts, flexible payment schemes, and rent-to-own offers are helping draw buyers back into the market.
The consultancy estimates that Metro Manila still has around 79,000 to 81,000 unsold condominium units, including roughly 30,000 ready-for-occupancy (RFO) units, keeping competition among developers highly intense.
Bay Area: high vacancy rates
Not all parts of Metro Manila are experiencing the same market conditions.
The Bay Area in Pasay City—covering developments near the Mall of Asia complex and Entertainment City—continues to record the highest vacancy rates in the capital, with levels projected to approach 60% as more towers are completed.
The area expanded rapidly during the POGO boom but has struggled to replace demand following the exit of many offshore gaming firms from the Philippines.
By contrast, established business districts such as Makati Central Business District, Bonifacio Global City (BGC), Rockwell Center, and parts of Ortigas Center have remained comparatively resilient, supported by steady demand from professionals, expatriates, and higher-income buyers.
Vacancy levels in these prime locations remain significantly lower than the metropolitan average.
Other active residential markets include Quezon City (QC), particularly the Cubao–New Manila and Katipunan areas.
Also on the list is the C5 corridor, where a significant portion of new supply is set for completion, along with Pasig, Mandaluyong, Alabang, and Las Piñas, where developers continue to launch projects aimed at mid-income buyers.
Developers are rolling out discounts, extended payment terms, waived fees, furnished units, and rent-to-own packages in an effort to reduce unsold inventory.
Some ready-for-occupancy projects are also being promoted with free appliances and lower reservation fees, as companies compete for a limited pool of qualified buyers.
Industry analysts say affordability remains the key challenge.
Although mortgage rates have eased slightly following recent monetary policy adjustments, financing costs remain relatively high, constraining demand among first-time homebuyers.
At the same time, rental yields have compressed in several oversupplied districts, leading investors to become more selective.
Gradual recovery
Looking ahead, property consultants expect Metro Manila’s condominium market to recover gradually rather than experience a sharp rebound.
Developers have become more cautious in launching new projects and are increasingly focusing on locations with stronger end-user demand rather than speculative investment.
Future supply is also expected to moderate significantly compared with pre-pandemic levels, which should eventually help absorb excess inventory.
Fringe growth corridors such as the C5 corridor are also expected to benefit from ongoing infrastructure investments and improved connectivity.
For now, analysts say Metro Manila remains a buyer’s market.
Homebuyers continue to enjoy stronger negotiating power than at any time in recent years, while developers face the challenge of balancing new construction with efforts to clear existing inventory before the condominium sector can return to sustained, long-term growth.
Highlights: Metro Manila Condo Market in 1Q 2026
- Condo glut remains significant: Metro Manila has about 81,000 unsold condominium units across 621 active projects, equivalent to roughly 31 months of supply at current sales rates.
- Oversupply unevenly distributed: The excess inventory is concentrated in specific locations rather than spread evenly across all central business districts.
- Large share of RFO units: Around 40% of inventory (about 32,400 units) is ready for occupancy, while 48,600 units (60%) remain under construction with completion timelines extending to 2032.
- Buyers benefit from RFO stock: Developers with completed units are offering discounts, flexible payment schemes, and other incentives to clear inventory.
- Demand shows early improvement: Sales reached 7,732 units in Q1 2026, up 19% year-on-year, though analysts say it is too early to confirm a sustained recovery.
- End-users driving demand: Most purchases are for personal use rather than investment, as weaker rental yields deter investors.
- Rental yields remain compressed: Average returns stand at about 3.8% in the primary market and 4.6% in the secondary market, limiting investment appeal.
- Prime CBDs remain tight: Bonifacio Global City (BGC) and Makati continue to have relatively low unsold inventory compared with other areas.
- Quezon City leads in inventory: QC holds around 19,300 unsold units, making it the largest contributor to Metro Manila’s condo overhang.
- Affordability gap emerging: Demand is rising for lower-middle-priced units (₱1.8 million–₱2.3 million), but new supply in this segment remains limited due to rising land and construction costs.
- Supply shifting upscale: Developers are increasingly focusing on higher-priced projects, limiting options for first-time and budget-conscious buyers.
- Growth shifting beyond Metro Manila: Nearby infrastructure-driven corridors are outperforming the capital, supported by transport projects and flexible financing.
Market outlook
Analysts expect a gradual recovery rather than a sharp rebound, dependent on lower borrowing costs, stronger buyer confidence, improved rental yields, and sustained economic stability.
For buyers, 2026 is seen as one of the more favourable periods in recent years to negotiate prices and payment terms, particularly for ready-for-occupancy units.
