Colliers PH: Metro Manila has 8.2 years of condo oversupply

According to a report by InsiderPH [link] on a briefing by Colliers PH research director Joey Bondoc, Colliers PH said that it will take 8.2 years to clear the inventory of unsold condo units (approximately 74k units) at the current sales pace. Mr. Bondoc said that the number of unsold units is 77% higher than 2023, with the large increase due to the POGO ban and the associated drain on demand for Metro Manila condos for workers in that industry. Mr. Bondoc said that the struggle to sell units was not universal across all segments of the condo market. High-end condos have been “doing relatively well” and only account for 5% of the unsold inventory in Metro Manila. 

MB bottom-line: My take on the condo backlog is simple. People don’t want to pay “booming condo market” prices for “imploding condo market” units. While it might be true that developers paid more for the properties on top of which the condos were constructed, the price that one paid for something in the past doesn’t have any bearing on the current market price of that thing now. Sales are slow because the actual market price of the condos is a lot lower than the developers want. That’s it. If they dropped prices dramatically, we’d see a huge uptick in the number of condos sold. People want to move into the city. They want to buy condos. They just don’t want to pay some artificially high price set in 2018 with pre-inflation crisis maintenance fees. It’s like the time I bought $TRUMP coin for $25.50. I sold most of it for $35.00, but I held on to six coins “just in case”. Well, $TRUMP never mooned. It’s sitting at $17.50/coin today, and if I tried to sell it for $25.50 “because that’s what I paid for it” when I bought it, the entire world is going to laugh in my face. Not only because I bought $TRUMP, but because buyers don’t care about your personal story. Markets are free of personal narratives, and the same goes for developers. If they want to take in some cash, they could lower prices and move units. Would it harm their profit projections for those projects? Yes, of course, but that’s life. Price is the reason the condo market is dead.

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