Condo oversupply eases, vacancy seen declining by 2026

The Metro Manila condominium market is showing signs of recovery, with fewer project launches, improved sales performance, and a drop in unit backouts helping to ease oversupply, a property consultancy said.

Colliers Philippines reported that aggressive promotional efforts by developers have led to greater take-up of ready-for-occupancy units across market segments. The consultancy also observed a notable decline in the number of partially paid units being surrendered by buyers.

“This is the good news that we’re seeing right now,” said Colliers Director and Head of Research Joey Bondoc during the firm’s second-quarter briefing. “Whether it’s mid-income, luxury, or ultra-luxury segments, we are recording positive take-up—meaning the take-up of these condos is greater than the backout.”

The number of unit backouts in Metro Manila dropped by 25 percent, from 4,800 in the first quarter of 2025 to 3,600 in the second quarter, according to Colliers data.

Bondoc attributed the improvement to targeted promotions by developers, noting that creative and flexible offerings have proven effective. “This only indicates that the ready-for-occupancy promos to be offered by developers are working and they should continue implementing these innovative, creative promos,” he said.

Another key factor contributing to the improved outlook is the slowdown in new launches. In the first half of 2025, developers introduced only 7,000 condominium units to the Metro Manila market. Bondoc said firms are becoming more selective, focusing on segments that continue to show resilience, particularly upscale, luxury, and ultra-luxury developments.

Vacancy in the secondary market—defined as units that are unsold or without tenants—is expected to decline from 25.8 percent to 25.3 percent by 2026. Colliers forecasts a further improvement to 23.4 percent by 2027, driven primarily by limited new supply and improving demand.

Metro Manila currently has around 30,500 unsold condominium units in the pre-sale market, including both ready-for-occupancy units and those under construction.

“Right now, it appears that the upscale, luxury, and ultra-luxury projects remain well-performing,” Bondoc added. “We’re more optimistic as of the second quarter of this year as to the projected vacancy for the secondary residential market.”

Despite lingering inventory, analysts said the overall trend suggests a gradual rebalancing in the capital region’s residential property sector, particularly if developers maintain discipline in new supply and continue to respond to evolving buyer preferences.