The Metro Manila residential property market is undergoing a significant recalibration as softening demand and the normalization of rental rates shift buyer behavior, according to Leechiu Property Consultants.
Following years of market distortion caused by premiums from Philippine Offshore Gaming Operators (POGO), affordability constraints and subdued rent yields are pushing buyers toward more value-driven strategies. Transactions are now concentrated in the secondary market and among developers offering targeted promotions.
“The market is in a recalibration phase. We’re seeing a shift from speculative buying to more value-driven strategies, with buyers exploring secondary market deals and developer promos. Rental rates are normalizing after years of distortion, which is healthy for long-term sustainability. But affordability remains the biggest challenge—addressing this gap is critical to encouraging broader market participation,” said Roy Amado Golez Jr., director for research, consultancy and valuation at Leechiu Property Consultants.
Metro Manila’s condominium inventory totaled 775,400 units as of November 2025. About 96 percent of ready-for-occupancy (RFO) units and 62 percent of pre-selling units have been sold.
The remaining unsold inventory, estimated at 26,400 RFO units and 53,900 pre-selling units, is heavily focused on the Upper Middle Income to Upscale segments (P4 million to P12 million). This reinforces the widening affordability gap for middle-income buyers.
Primary market demand remains subdued as speculative buying has decreased. Buyers are increasingly exploring the secondary market, where flexible pricing offers better value. Developers are sustaining primary unit sales through promotions and limited incentives. Meanwhile, motivated sellers, many of whom acquired units during the POGO boom, are liquidating assets at competitive rates. This directly competes with new launches and slows the pace of absorption.
Rental yields remain modest as current rents settle back to real market levels, correcting from the POGO-driven premium rates that previously inflated benchmarks. These inflated rents created unsustainable expectations across several Central Business Districts (CBDs). Bonifacio Global City (BGC) was less affected, experiencing milder downward adjustments compared to other districts. Today’s rental values more accurately reflect actual demand, though yields are under pressure against historical highs.
Outside Metro Manila, residential condominium supply is concentrated in major regions: Cebu leads with over 100,000 units, followed by CALABARZON with more than 66,000 units. Iloilo and Bacolod maintain moderate inventory. In Mindanao, Regions 10 and 11 show strong pipeline activity relative to existing stock, driven by township projects and infrastructure expansion, shaping long-term growth prospects.
A structural challenge remains the housing backlog, which stood at 10.65 million units as of 2024, with persistent undersupply in the low-income segments. Developers remain cautious about entering this segment due to thin margins and compliance hurdles.
To address this, policy reform discussions are ongoing among government agencies, the private sector and the academe. The focus is on measures such as adjusting price ceilings and improving compliance frameworks. The government is also pursuing financing programs to expand access for low-income households. Alternative ownership models like rent-to-own schemes are gaining traction, signaling a collaborative approach to closing the gap and promoting inclusive housing nationwide.
