PHILIPPINES — Residential condominium take-up in Metro Manila climbed 17 percent to 8,454 units in the third quarter of 2026, according to Leechiu Property Consultants Inc. The improvement was driven by aggressive developer promotions and government housing initiatives, though analysts caution the gains may not signal sustained growth.
A Quarter of Improvement, Not a Recovery
The quarterly uptick pushed unsold inventory down to 80,000 units across 639 primary buildings, easing from a record 82,900 units in the previous quarter. Months of supply fell from 34 to 28, though LPC noted this remains well above manageable levels. The market still has significant ground to cover before reaching a healthy balance.
Sharon Joy Roset-Saclolo, associate director and head of research at LPC, attributed the improvement to coordinated efforts bridging affordability and financing gaps. However, she warned that buyers are likely to remain selective, focusing on value, quality, financing flexibility, and capital preservation rather than rushing into purchases.
Ready-for-Occupancy Units Drive Sales
The recovery was uneven across property types. Sales of ready-for-occupancy units surged 89 percent year-on-year, while preselling sales fell 26 percent. This divergence suggests buyers prefer completed units that offer immediate utility and lower risk amid economic uncertainty. Developers responded by curtailing new launches.
New project launches plunged 39 percent quarter-on-quarter to 1,574 units, with roughly 90 percent belonging to the upscale segment. Rather than introducing fresh supply, developers concentrated on moving existing inventory through generous incentives. These measures helped reduce the overhang but relied heavily on discounts to attract buyers.
Generous Promotions Move the Needle
Promotions were most pronounced for ready-for-occupancy projects, featuring down payment terms of up to 60 months and deferred payments reaching 120 months. Cash discounts climbed as high as 60 percent, significantly lowering entry barriers. Preselling projects offered down payment terms up to 72 months with promotions reaching 50 percent.
Government support complemented these private sector efforts. Housing finance programs extended fixed 4.5 percent interest rates for three years on loans between ₱2.5 million and ₱4.9 million. The Pag-IBIG Fund also raised its maximum loanable amount to ₱10 million, expanding access for middle-income buyers seeking homes near workplaces.
Concentration of Unsold Stock Remains a Concern
About two-thirds of unsold inventory remains concentrated in the upper-middle segment, priced from ₱4 million to ₱7 million, and the upscale segment, priced from ₱7 million to ₱12 million. This concentration creates pricing pressure that could ripple across the broader market if absorption slows.
Rental yields stayed compressed at 3.4 percent to 4.7 percent for primary units due to soft rents and elevated capital values. Substantial developer discounts could improve yields to 3.8 percent to 5.1 percent for spot cash buyers. These figures highlight the delicate balance between attracting buyers and preserving investment returns.
Headwinds Could Limit Sustained Growth
LPC identified several factors that continue to weigh on buyer confidence. Affordability constraints, elevated inventory levels, compressed rental yields, inflationary pressures, financing costs, and ongoing political uncertainty all pose risks. These headwinds could limit the sector's ability to maintain recent demand levels without continued support.
The consultancy remains cautious about whether current performance can be sustained once developer incentives and housing finance initiatives taper off. The market's challenge lies in whether organic demand can replace promotional-driven transactions. Until that question is answered, the recovery remains tentative.
