What Investors Should Expect from the Condo Oversupply in Metro Manila

Current Condition of the Condominium Market in the Philippines

From the pandemic to the global tension that’s causing oil price hikes right now, the real estate market in the Philippines seems to struggle again. Some experts say that the market is in critical condition because of the oil crisis making the inventory oversupply even worse. So if you’re an investor, there are some important things that you need to anticipate before making any investment decisions today.

Condo Market Inventory Oversupply

Currently, there’s 8.2 years of condo glut in the country, with around 30,400 to 90,000 empty condominium units remaining unsold in Metro Manila. These figures show a significant oversupply, particularly in Quezon City, Pasig, and Paranaque. Before you invest, make sure to anticipate these crucial factors:

• Stronger competition for tenants.
      
  
• Limited capital appreciation.
      
  
• Lower rental yields.
  

Now, there are other key concerns that you should consider when making an informed decision regarding your investments. In terms of the massive overhang, Colliers Philippines explained that it may take more than eight years to get the unsold condo units occupied. By the end of 2025, the residential vacancy rate in Metro Manila reached up to 24.7%. This high vacancy rate means approximately one in four condominium units is empty.
Moreover, the banning of POGO also led to high vacancy rates and declining rental income. Meaning, there’s a fiercer competition adding more pressure on rent. Another thing that’s concerning for investors is the misalignment of demand. There exists a bold disparity between market affordability and luxury supply. Apparently, many Filipinos can’t afford the hefty price tags of these unsold condos.

Final Thoughts

Now that you know about the current situation of the condo market in the Philippines, always do some precautions before investing. Real estate investments in saturated markets can impose significant risks. Therefore, you must do your diligence and study the market so you can make sound decisions during tough times. You may log onto REALS.PH website to check out some exclusive listings of condominium units in Baguio City and other strategic locations nationwide. Talk to us today so our real estate agents can help you get started with you next investment.