January 22, 2025
Metro Manila’s real estate market is undergoing a dual narrative of challenges and opportunities. On one hand, the region faces an oversupply of office spaces and condominiums; on the other, it leads the world in prime residential growth, showcasing its resilience and global appeal. This unique interplay provides a deeper understanding of the complexities within Metro Manila's real estate sector in 2025.

1.Understanding the Oversupply in Metro Manila
The oversupply of real estate in Metro Manila traces its roots to aggressive development between 2017 and 2019, driven by urbanization, rising incomes, and the booming Business Process Outsourcing (BPO) sector. However, the COVID-19 pandemic disrupted this momentum, leading to shifts in work arrangements and economic uncertainties that significantly altered the demand-supply balance.
The rise of remote work reduced the need for office spaces, leaving many commercial buildings with high vacancy rates. Simultaneously, mid-market condominiums priced between ₱3 million and ₱20 million struggled to attract buyers due to financial uncertainty. The exit of Philippine Offshore Gaming Operators (POGOs), which once occupied 10% of Metro Manila’s leasable office space, further exacerbated the situation, impacting both office and residential markets.
Currently, Metro Manila holds 29 months’ worth of condominium inventory, with 67,600 units available across 510 actively selling buildings. Developers have responded by scaling back on new project launches, offering competitive payment terms, and enhancing property features to attract buyers. Lower interest rates and easing inflation, supported by Bangko Sentral ng Pilipinas’ (BSP) policy adjustments, present a buyer-friendly environment, creating opportunities for investors.

2.Manila: A Global Prime Residential Hotspot
Despite the oversupply in some sectors, Manila has emerged as a global leader in luxury real estate growth. According to Knight Frank’s Prime Global Cities Index, the city’s prime residential prices surged by 21.2% year-on-year in Q3 2023. This performance underscores the Philippines’ expanding wealth and the resilience of its luxury market, even during the pandemic.
The post-pandemic surge in demand for high-end properties has driven significant price appreciation. At the height of the pandemic, property prices nationwide increased by 27% year-on-year, the highest since 2016, as reported by the BSP. Luxury properties have become a preferred choice for investors, seen as stable, long-term assets with intrinsic value and growth potential, even amid rising global interest rates.
3.Wealth Expansion and Market Dynamics
The growth in high-net-worth individuals (HNWIs) and ultra-high-net-worth individuals (UHNWIs) in the Philippines has further fueled demand for luxury properties. In 2021, the country recorded 13,936 HNWIs and 489 UHNWIs. By 2025, these numbers are projected to rise to 18,989 and 658, respectively. This wealth expansion has encouraged developers to prepare for increased demand by expanding supply in the luxury market.
Manila’s luxury properties offer exceptional value compared to other global cities, with larger spaces available at competitive prices. This affordability and quality make the city an attractive destination for both local and international buyers seeking premium real estate investments.

4.Regional Shifts and Policy Support
While Metro Manila contends with oversupply, developers are exploring growth opportunities in emerging markets across Visayas and Mindanao. Cities like Iloilo, Bacolod, and Bohol are experiencing heightened demand, outpacing supply. Additionally, the hospitality sector in Metro Manila and beyond is expanding, reflecting a growing demand for midscale and upper-midscale accommodations.
Supportive policies under the administration of President Ferdinand Marcos Jr. have bolstered investment confidence, further enhancing the appeal of the country’s real estate market. International buyers are particularly drawn to the opportunity to acquire larger luxury properties in Manila at a fraction of the cost in other global cities.
5.Opportunities Amid Complexity
Metro Manila’s real estate market is at a crossroads, balancing oversupply in some segments with record-breaking growth in the luxury sector. Developers are adapting by scaling back launches, re-strategizing offerings, and shifting focus to regional markets. The city’s prime residential market, supported by wealth expansion, strong demand, and competitive pricing, remains a beacon of opportunity.
For investors and homeowners, the current landscape offers a rare blend of challenges and opportunities. Whether navigating the oversupply of condominiums or capitalizing on the booming luxury segment, Metro Manila’s real estate market is ripe for strategic investments, promising resilience and growth in the years to come.
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