towards Katherine K. Chan
Sluggish demand and condominium units in the market have dampened growth in residential property prices in the National Capital Region (NCR), say analysts, who may continue to remain subdued.
Joey Roi H. Bondoc, director and head of research at Colliers Philippines, said the weak demand for condominium units in the middle and low-income segment Rising house prices in NCR.
“I think we’re going to pull that off ( Businessworld in a telephone conversation.
He said of the 31,000 condominium units that remain unturned in the RFO market, about 60% are less than the in-cash portion or those that cost P3.6 million to P3 million per unit.
Home prices in Metro Manila posted a slower growth of 2.4% in the second quarter from 13.9% in the same quarter last year, the Bangko Sentral NG Pilipinas (BSPI) showed.
Quarter on quarter, NCR house prices gained 3.6%.
Condominium unit prices also dipped by 0.2%, back from a 11.5% increase in the year before and ahead of a 10.6% increase in the previous quarter.
Roy Amado L. Golez, Jr., Director of Research and Consulting for Leechiu Property Experts, said that consumer sentiment and preferences have affected the growth of condominium prices over time.
“The decrease in the year-on-year growth of Conc concrete in NCR from Q1 2025 (13.9%) to Q2 2025 (2.4%) can be attributed to Oversupply,” he told Businessworld by email. “Consumers are responding with a very critical assessment of their needs before making any purchase. There are several thoughtful purchase options in the market today with NCR.”
Mr Golez said second hand or pre-owned units sold at low prices are also meeting some of the housing needs.
“Note that RPPI does not only include basic units from developers – secondary units are competing for demand, and motivated sellers are selling at a discount to be able to extract their discounts,” he said.
“With a place at a low yield, some owners find it more attractive to put their investment money and divert other computer instruments. This can also include the sale of condominiums with advanced prices that contribute to the creation of their raw inventory.”
He also added that the Manila engineering project in Metro Manila has been implemented as it still has existing infrastructure.
Claro DG. Corroro, Jr., director of research, to show the services of CUSMAN AND Wakefield, said the strong inflation ‘may be that the price growth is increasing, adding that the 13.9% of the first quarter is “difficult to reconcile.”
That may have done that the decline was too sharp,” he added.
Mr. Cordero also over-linked the condominium units in the Philippine Offshore Operations (POGOS) ban, whose employees lived in such a place before.
“(A) Most of the over-inventory is because the units are lost to the Pogos … So, as the Pogos leave towards the end of the year,” he said.
At the same time, high income and high mortgage rates are also affecting the demand for condominium units in the rental market, Mr. Bondoc said.
He said the loan rate from five years ranges from 7.7% to 7.8% and it would cost more if he waits for more than five years.
“So, the rental market is sluggish at this point … which means if I buy a condominium unit (and) when it’s open, will I be able to rip off a BPO job or a foreign worker?” Mr. Bondoc said.
“Unfortunately, the rental market is moving in metro manila right now because (there are) many condominium owners (and) they are setting low rental rates,” he added.
BSP data showed that the median price of all types of houses in the Philippines stood at P3.4 million in the second quarter. Condominium Units had an average price of P3.8 million, while houses cost around P3.1 million.
Houses in NCR were the most expensive with an average price of P7.01 million, while houses in other areas of the Philippines were around P2.7 million.
Taking it slow is persistent
Mr. Golez said condominium sales have improved in the third quarter amid low prices.
“Now … We are seeing renewed buyer activity in the (Metro Manila) Condominium Market,” he said. “Lower interest rates are likely to fuel this resurgence in demand, along with discounts and promos from developers.”
The Central Bank’s Lesken rate stands at 4.75%, the lowest in three years. It lowered the benchmark currency rates by 175 basis points starting its reduction cycle in August 2024, and BSP Governor Eli M. Remolona, Jr. leave the door open more The cuts in the coming months will help strengthen domestic demand due to a softer economic outlook as increased corruption involving government infrastructure projects has affected business sentiment.
However, COPOMINIIM price growth, especially for secondary units, in the NCR will be moderate but may recover in the medium term if supply levels are increased, said Mr Golz.
“The speed of the recovery will depend on how quickly developers clear up the stock that is unmatched, whether consumer sentiment improves, and when rental demand picks up on price increases.”
Mr. Bondoc said that there is a tepid demand for condominium units in Metro Manila that will probably continue until they start as the number of units is not bad. However, RFO promos and RFO discounts can help attract buyers.
“We have seen that there is an improvement in the taking of condominiums in (the) second quarter of this year due to the promos and discounts offered by the condominium units for 2025,” he added.
He said the “strong” demand seen in residential properties outside Metro Manila is easing the slowdown in the capital.
“I think it’s a little bit more robust outside of metro manila. So, that has pushed back the desire to burn condominium units in the financial district that we’re studying at this point.”
“Buyer interest is increasing in housing options outside the NCR, especially affordable housing. Developers are responding in kind by continuing to develop townships without improving infrastructure and lifestyle appeal,” said Mr Golz.
In areas outside the NCR, home prices rose 11.5% in the second quarter, faster than the 3% growth posted in the first quarter and 7.2% a year ago, BSP data showed.
Mr. Cordero said that they see home prices rising in the surrounding country, especially in pressure areas in rich regions like CEBU.
“That is driven by the continued demand for larger living spaces and horizontal development and regional migration and infrastructure improvements.”
