Buying Condominiums in Manila: Is It Worth It?
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Mixed use commercial and residential building in Quezon City (photo by Rene Astudillo)
Many buyers and investors are now struggling to see returns on their investments, while middle-class and low-income families remain priced out of decent housing.
Over the past two decades, Manila has witnessed an unprecedented condo construction boom. Fueled by urban migration, foreign investments, and the growing purchasing power of overseas Filipino workers (OFWs), developers rushed to build high-rise residential properties across Metro Manila.
Condominium Boom
Major areas in Quezon City, Makati, Bonifacio Global City (BGC), Ortigas, and Manila Bay became hotspots for condominium projects, offering promises of luxury, accessibility, and investment potential.
Many of these developments were targeted at investors rather than end-users, with the expectation that units could be rented out to young professionals, expatriates, and students.
The rise of Airbnb and other short-term rental platforms further drove speculative buying, as many investors sought to profit from transient renters. However, this overreliance on rental income backfired when the COVID-19 pandemic hit, causing a sharp decline in demand for short-term stays and long-term leasing.
Oversupply and Vacancy Rates
One of the biggest issues fueling Manila’s condo crisis is the oversupply of units. Developers aggressively built condominiums without fully assessing actual housing demand, resulting in a glut of unsold and unoccupied units.
According to property analysts, Metro Manila’s vacancy rate has reached record highs, particularly in key business districts like Makati and Ortigas, where thousands of units remain unoccupied.
The COVID-19 pandemic exacerbated this problem as many expatriates and local renters left the city due to remote work policies and financial difficulties. Students, who were once a major rental market in areas near universities, also vacated their units when schools shifted to online learning. This sudden drop in rental demand left many condo owners struggling to find tenants or sell their units at a profit.
Even as demand dwindled, developers continued launching new projects, further flooding the market with residential units. This oversupply has put downward pressure on rental and resale prices, making it difficult for investors to recoup their initial investments.
As of October 2024, Metro Manila faced an oversupply of approximately 67,600 condominium units across 510 actively selling buildings, equating to a 29-month inventory, Leechiu Property Consultants (LPC) reported. A balanced market typically maintains a 12-month supply.
Middle-Class Dilemma
Despite the oversupply, homeownership remains a distant dream for many middle-class Filipinos. The average price of a condominium unit in Metro Manila has skyrocketed over the years, with even small studio units in prime locations costing millions of pesos.
In 2023, the average price of a luxury 3-bedroom unit in Metro Manila’s central business districts (CBDs) rose by a modest 3.98 per cent to Php203,550/sqm ($3,571/sqm), as per Colliers International.
Many young professionals and starting families find it difficult to afford a unit without taking on long-term loans that strain their finances.
High property prices are driven by several factors, including rising land costs, expensive construction materials, and the profit-driven strategies of developers. Additionally, the banking sector imposes strict mortgage requirements, making it challenging for low- and middle-income earners to secure housing loans.
At the same time, the supply of affordable housing options remains inadequate. While developers do offer “affordable” condominium units, these are often located in less accessible areas with limited public transportation, forcing potential buyers to reconsider their options. This results in a paradox where there is an oversupply of high-end condos but a shortage of truly affordable housing.
Without urgent action, Manila risks turning into a city filled with empty high-rises that only a privileged few can afford.
Rise and Fall of Condo Investments
For years, many Filipinos viewed condo ownership as a safe and profitable investment. Pre-selling units were marketed as high-yield assets, with developers promising lucrative rental income and appreciation in property values. However, the reality has been different for many investors.
With the high number of vacancies and falling rental prices, many condo owners are now struggling to attract tenants or sell their units at a reasonable price. Those who purchased units at peak prices find themselves in negative equity situations, where the market value of their property is lower than the amount they owe in mortgage loans.
Furthermore, homeowners’ association fees, property taxes, and maintenance costs continue to pile up, adding to the financial burden of condo owners. Many have resorted to selling their units at lower prices just to cut their losses, but even finding buyers has become a challenge due to market saturation.
Manila’s condo crisis is a complex issue rooted in years of aggressive development, speculative investments, and affordability challenges. While the real estate boom brought economic growth, it also created a market imbalance that now leaves many investors struggling and aspiring homeowners unable to afford decent housing.
Addressing this crisis requires a combination of better urban planning, financial support for homebuyers, and policies that prioritize sustainable housing development over pure profit.
Without urgent action, Manila risks turning into a city filled with empty high-rises that only a privileged few can afford, while the majority of its population remains in search of livable and affordable homes.
Rene Astudillo is a writer, book author and blogger and has recently retired from more than two decades of nonprofit community work in the Bay Area. He spends his time between California and the Philippines.
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