Metro Manila condo vacancy may drop in 2026
METRO MANILA’S residential market continues to experience dampened take-up for mid-income condominium projects (priced from P3.2 million to P12 million per unit). This has prompted major property developers to aggressively offer attractive and innovative ready-for-occupancy (RFO) promos to encourage more buyers to acquire units in the capital.
Hefty discounts on spot cash payments, extended payment terms, free appliances, and other concessions are indeed enticing more investors to purchase vertical units. These promotions appear to be effective, with Colliers recording improved take-up across nearly all condominium price segments in Metro Manila.
We are now seeing a more pronounced influx of luxury developments — high-end projects dominating both supply, through new launches, and demand, as evidenced by positive net take-up for luxury to ultra-luxury units priced at P100 million and above.
Developers have become more prudent with their launches within and outside Metro Manila, capitalizing on a consumer base flush with cash and actively seeking capital value appreciation opportunities even beyond the capital.
DEMAND AND RENTS REMAIN SOFT
Weak demand for units for rent and for sale has resulted in elevated vacancy levels across Metro Manila, particularly in the Bay Area, which continues to suffer from the effects of the Philippine offshore gaming operator (POGO) exodus. More established central business districts (CBDs) continue to outperform their peripheral counterparts.
We forecast a marginal rental correction of 1.5% in 2025, followed by a recovery in 2026 as vacancy begins to ease. We also expect sustained demand, particularly from expatriates seeking larger units and more open spaces.
VACANCY TO EASE IN 2026 AND 2027
Colliers expects vacancy levels to begin declining in 2026 as condominium completions slow and demand picks up, especially in key CBDs. This trend will likely continue through 2027, driven in part by fewer unit turnovers and stabilizing take-up in major business districts.
We project a more stable vacancy rate in Metro Manila over the next 24 to 26 months, as the worst impact of the POGO exodus on the condominium market has likely passed.
CUT-THROAT RFO BATTLE TO CONTINUE
As of the second quarter (Q2), the remaining condominium inventory in Metro Manila stands at 81,000 units, 30,600 of which are RFO. Colliers recommends that developers with significant RFO inventory offer more attractive and curated promos. We have seen select developers offer up to 40% discounts on total contract prices (TCPs) for spot cash payments, early move-in packages, rent-to-own options, and even gift certificates of up to P150,000 ($2,700).
Meanwhile, tenants and buyers should watch for areas offering larger discounts on lease rates and prices. In our view, RFO units in the Bay Area and other fringe locations are likely to be offered at steeper discounts due to slower demand and elevated vacancies caused by the POGO exit.
DEVELOPERS CORNER LUXURY DEMAND
The substantial volume of unsold inventory in the mid-income segment (P3.6 million to P12 million) is prompting developers to pivot toward high-end developments. In 2024, Colliers recorded that the upscale to ultra-luxury segments (P12 million and above) accounted for 41% of total condominium launches in Metro Manila. Several developers have recently launched new luxury projects both within and beyond the capital. These include Ayala Land Premier’s Laurean Residences in Makati, Cebu Landmasters’ The Wave in Cebu, and SM Prime’s Signature series, which will be located across several provinces.
Colliers expects demand for luxury projects to remain strong, with take-up driven primarily by expatriates, international visitors, and sustained interest from affluent buyers. Developers should emphasize upscale amenities, premium concierge services, and strong capital appreciation potential — key considerations for discerning investors and end-users.
Joey Roi Bondoc is the director and head of Research of Colliers Philippines.
