It may take 8 years before Metro Manila condos are bought. Where are people going?

Upgrade to High-Speed Internet for only ₱1499/month!

Enjoy up to 100 Mbps fiber broadband, perfect for browsing, streaming, and gaming.

Visit Suniway.ph to learn

MANILA, Philippines – Metro Manila has more condominium units available versus what it can sell.

According to Colliers Philippines, a property consultancy firm, it may take over 8 years before the ready for occupancy (RFO) units in the metro will be taken up by the market. More units are also expected to be in the market this year — at least 8,900 with Colliers expecting the Bay Area in Pasay positioning itself as the “largest residential hub by 2025,” making up for 27% of the condominium supply in Metro Manila and surpassing Fort Bonifacio.

The oversupply of condominium units may be attributed to several factors. Among them is the government’s directive to ban Philippine offshore gaming operations (POGOs), which has affected even the demand for office space. Colliers in its February 11 report noted that the ban led to condominium vacancy rates reaching “an all-time high” at 23.9% in 2024.

“We see vacancy likely remaining above 20% by 2025 with the still substantial delivery of new units and as the full impact of POGO exodus takes effect,” the property consultancy firm said in its report.

However, it seems like the market is slowly shifting its interests — where are people headed?

Opportunities in areas beyond CBDs

Andoy Beltran, vice president and head of business development and market education at First Metro Securities, noted that people are now looking for living spaces that can accommodate the multiple needs of the families.

“As individuals, we realized the importance of space,” Beltran told Rappler.

When everybody was locked down during the pandemic, everybody had to do everything at home — from working, studying, and cultivating hobbies. People found the need for more space, which may be limited especially for those in high-rise condominiums in the metro.

“The silver lining is that property buyers are now exploring areas even outside Central Business Districts… we’re seeing a shift in demand, going to the outskirts… or fringe locations,” said Beltran in mixed English and Filipino.

Workers now also prefer employers who let them work from home on certain days of the week, making moving outside Metro Manila possible.

Colliers in its report also noted that “resort-themed projects” outside Metro Manila have become more popular.

Beltran said that property developers previously preferred CBDs for new projects — this includes areas such as Makati, Bonifacio Global City, Ortigas, and the Bay Area in Pasay. “The supply pipeline has been quite aggressive over the years,” Beltran said.

But now, developers are catching wind of the changes in consumer demand.

Billionaire Andrew Tan’s Megaworld Corporation — the developer behind Eastwood City in Quezon City and McKinley Hill in Taguig — announced new township projects outside Metro Manila in 2024, namely: the Lialto Golf and Beach Estates in Lian, Batangas; San Benito Private Estate in Lipa, Batangas; Ilocandia Coastown in Laoag City, Ilocos Norte; and The Upper Central in Cagayan de Oro City. In 2025, Megaworld is heading to “key growth areas” in Luzon and Visayas.

Meanwhile, SM Investments Corporation is also eyeing “new regions where growth is accelerating,” moving away from Manila and into the provinces in 2025. This is a continuation of the conglomerate’s efforts in the previous year, where 85% of its new launches were in the provinces.

Provinces, on the other hand, are also catching up. Beltran pointed out that Iloilo is slowly becoming a “BPO (business process outsourcing) haven,” opening up the local economy and attracting investors in the process.

“Investors are capitalizing on emerging economic hubs. Those that are not yet considered CBDs but have the potential to be the next CBD,” Beltran said.

Projects should still, however, cater to all aspects of life, especially for the younger generation.

For Beltran, this means that having a home with enough space should only be the beginning.

“In order for you to appeal to the younger generation who is more social, more outgoing, with a shorter attention span, I think townships would more appealing,” he said. “Or anything with a community set up.”

A buyer’s market

While the luxury market remains unscathed, it seems developers are becoming more strategic when it comes to launching projects — preferring to go in phases.

In the first half of 2024, Ayala Land’s earnings were buoyed by sales in its premium residential segment – Alveo Land and Ayala Land Premier. Company executives also noted that the “Filipino consumer is continuously becoming more affluent” as more first-time buyers are getting properties from their premium brands.

Arthaland’s 37-unit “limited edition residences,” Eluria, is already 50% sold ahead of its completion. Units at the Makati condo cost from P150 million to P400 million.

DINING ROOM. This photo features the dining area of one of Eluria’s 3-bedroom units. Photo from Arthaland

The luxury segment only accounted for 5% of the unsold RFO units in 2024.

According to Beltran, the market of luxury properties see the houses or condominiums they acquire as investments instead of getting their “dream homes.”

“There are high net worth individuals who often view prime real estate as just a hedge against inflation and [are] looking at it as a long term investment. It’s not really a house they can call their home,” said Beltran.

But the oversupply of condominiums in Metro Manila has turned it into a buyer’s market: developers are now offering discounts and more flexible payment terms are offered in an attempt to lower their inventory.

“A lot of them are offering extended payment terms,” Beltran said. “Lower reservation fees, rent to own schemes… some are even bundling units with furniture or even waiving certain fees just to attract more buyers… promotional financing is also back.”

For example, Villar’s Vista Land launched its MOVE program designed to “streamline the purchase process of select RFO house and lot developments and condominium properties.”

“Developers are partnering with banks to offer better financing options, making it more manageable for end users to purchase properties,” Beltran added. – Rappler.com