The Metro Manila residential property market is regaining its footing, fueled by renewed demand from mid-income buyers and surge in ready-for occupancy sales.
This rebound has boosted end-user confidence and quickened the pace of property take-up across major business districts
Colliers Philippines director and head of research Joey Roi Bondoc said the residential market has entered a “sustained recovery phase” after years of subdued activity caused by pandemic disruptions and the pullout of offshore gaming firms.
“The mid-income condominium segment, priced between P2.5 million and P12 million, has become the sweet spot of the market. Developers are responding with flexible RFO payment schemes and creative rent-to-own programs that continue to attract end-users and returning overseas Filipino buyers,” Bondoc said in Colliers’ latest briefing.
Buying momentum
From January to September 2025, Metro Manila posted a net take-up of 9,000 condominium units, almost matching the full-year 2024 figure. The affordable and mid-income brackets accounted for 94 percent of total sales, underscoring the dominance of this segment despite tighter household budgets.
Bondoc attributed much of the momentum to aggressive RFO campaigns that allow faster occupancy and ownership conversion. Developers are offering extended down payment terms, spot cash discounts of up to 60 percent, and renter-to-owner programs that bridge the gap between leasing and purchase.
Some projects even come with fully furnished units and free parking, with move-in fees as low as 5 percent, payable over 36 months before conversion to ownership.
“These promotions have triggered real end-user activity,” Bondoc said. “We’re seeing professionals, young families, and OFWs buying units they intend to occupy, not speculative investors waiting for price appreciation.”
Because of these promotions, the share of unsold RFO units in the mid-income segment dropped from 60 percent in early 2025 to 47 percent by the third quarter.
Tighter supply
Colliers projects 8,600 new units to be completed this year, down from the pre-pandemic annual average of 13,000. Supply will decline further to 3,600 units annually from 2026 to 2028, helping ease the 25-percent vacancy rate in the secondary market.
Vacancy is expected to peak at 26.5 percent in late 2025 before gradually falling to 26 percent in 2026 and 25 percent in 2027. Core districts like Rockwell and Makati now post healthier vacancy levels of 10 percent and 13 percent, respectively, while Fort Bonifacio remains higher at 20 percent due to recent completions.
“We’re seeing a natural correction,” Bondoc said. “With limited new supply and continued RFO absorption, we anticipate a more balanced market by 2026.”
Mid-income strength to sustain recovery in 2026
Colliers expects steady absorption through 2026, supported by innovative RFO offerings, disciplined supply rollout, and the continued rise of fringe and township locations.
Bondoc, however, warned that the sustainability of aggressive RFO promotions will depend on developers maintaining financial discipline.
“You can’t offer anniversary discounts every quarter. Developers will need to balance incentives with brand value. The market is turning a corner. The RFO resurgence has reignited real demand in the mid-income segment. Developers are adapting, buyers are returning, and the residential sector is on course for a more stable, sustainable recovery heading into 2026,” he explained.
