Metro Manila condominium market registers tempered growth in second quarter of 2025

The residential condominium market in Metro Manila showed mostly tempered growth in the second quarter of 2025, according to real estate brokerage firm Leechiu Property Consultants Inc.

While financing conditions are improving for buyers, driven by declining interest rates, attractive developer payment terms, discounts, and value-added features, declining rental yields may be discouraging investors seeking passive or rental-income based returns, Leechiu Property said.

Despite competitive terms and value-added features offered by developers, demand remained tempered by softening appetite from passive investors and speculative buyers. Rental yields continue to be affected by corrections related to the exit of Philippine Offshore Gaming Operators (POGOs) and the likely high availability of units for lease.

Roy Golez, director of research, consultancy and valuation at Leechiu Property, noted that demand drivers remain strong, developers are offering more lenient payment terms, and financing conditions are becoming more favorable. However, he explained that actual sales continue to lag because buyers are held back by declining rental yields and the perception of overpricing.

Golez also suggested that the relationship between developers and buyers needs to evolve into a mutually beneficial arrangement, rather than solely relying on price-based incentives. He believes developers could focus on measures that enhance income and reduce risk, such as rent support programs and improved, sustained after-sales services. These, he said, could help give buyers the confidence to invest despite the current market challenges with yields.

New residential condominium launches in Metro Manila increased by 31% in the second quarter to 1,761 units, indicating moderately improved developer confidence. Take-up rose 2% to 6,643 units, supported by improving financing conditions.

For prime village buyers, options south of Metro Manila are becoming increasingly attractive, with prices offered at a significant discount compared to traditional choices in core central areas.

Prices for golf and country club shares surged by up to 669% above pre-pandemic levels in the fourth quarter of 2023, but prices have remained relatively flat since then, indicating tepid demand for existing shares. Meanwhile, more golf communities are set to emerge in the south, offering buyers a wider range of options.

Improved accessibility from existing infrastructure projects, affordability, and well-planned townships are driving buyer preferences to shift outside Metro Manila. This trend has been made possible by the participation of top developers introducing a wide range of high-quality, master-planned developments.

In the Visayas, the majority of the remaining residential condominium supply in Cebu Province is located in Metro Cebu. Demand declined by 15%, from 2,763 units in the second half of 2024 to the first half of 2025, while supply increased by 14% to 3,195 units over the same period.

The middle-income segments, particularly the two lowest sub-segments, performed strongly in the first half of the year, followed by the high-end and luxury segments. However, caution is still warranted, as the current supply stands at 27 months.