logo
Philippine Developers Turn Cautiously Optimistic Amid Metro Manila Condominium Supply Glut

Philippine Developers Turn Cautiously Optimistic Amid Metro Manila Condominium Supply Glut

Forbes21-05-2025

Philippine builders from Ayala Land to the billionaire Sy family's SM Prime are slowing down the construction and marketing of new high-rise housing projects as the real estate industry grapples with an oversupply of middle-income condominiums in Metro Manila.
Demand for condominiums ebbed after the government banned offshore gaming operators in the Philippines and the country's economic growth slowed, developers were left with more than 70,000 of unsold units as of end-2024, according to estimates by property consultants Colliers and Leechiu.
To move the inventory, developers have introduced creative pricing schemes to make the condominiums more affordable to buyers. The menu of enticements include low down payments, longer payment periods as well as rent-to-own schemes. Companies are also throwing in furniture and free parking space as well as helping buyers lease out their properties to prospective tenants.
'We are highly selective with new launches.'
While the promotions have spurred first-quarter take-up to rise 14% from fourth-quarter 2024 per Leechiu's assessment, developers have slowed the introduction of new projects. That should help minimize the oversupply, which Colliers estimates would take the market almost eight years to clear.
'Our outlook for the residential market in 2025 is cautiously optimistic,' Mybelle Aragon-Gobio, president and CEO of Robinsons Land, part of the billionaire Gokongwei family's JG Summit, told Forbes Asia. 'We are highly selective with new launches, focusing on high-demand locations, and we offer more flexible payment terms, to match what the market needs today.'
An artist impression of the 285-unit Aurelia Residences, a luxury condominium project being jointly developed by Robinsons Land and Shang Properties, controlled by Malaysian billionaire Robert Kuok and his family.
Ayala Land—which offers longer payment terms on some of its high-rise residential projects in Metro Manila—is focusing on horizontal developments, according to CEO Ma. Anna Margarita Dy.
The company spent 12.6 billion pesos ($227 million) in the first quarter on horizontal development projects outside of Metro Manila, Dy said. It will start marketing the bulk of its new residential projects in the second half when interest rates are seen to ease, she adds.
'We've just become more cautious based not so much on our inventory levels but on industry wide inventory levels,' Dy said. 'We will focus mostly on horizontal developments.' Ayala Land's sales in Metro Manila fell 15% in the first quarter, while those outside the capital region rose 3%.
While demand in the premium residential segment where properties are priced at 12 million pesos ($215,000) to 50 million each increased slightly during the quarter, Colliers noted that sale of units priced between 7 million pesos and 12 million pesos have been softening. Bulk of the oversupply is in this middle-income segment of the market, according to the property consultancy.
An artist's impression of The Crestmont, a 49-story residential tower DMCI Homes is building in Querzon City, north of Manila.
Meanwhile, demand for ultra luxury apartments priced at 50 million pesos and above remains robust, Colliers added. Ayala Land—the real estate arm of tycoon Jaime Zobel de Ayala's Ayala Corp., the country's oldest conglomerate—is set to launch in the second half a resort-themed luxury tower in Makati, building on the strong demand for Park Villas, a 51-story ultra-high-end residential tower at the heart of the central business district where each floor has a single unit priced at over 500 million pesos ($9 million) each.
DMCI Homes—controlled by tycoon Isidro Consunji and his family's DMCI Holdings—is offering buyers a rent-to-own option to make the company's projects more affordable, requiring minimal upfront costs. 'This setup offers a practical solution for those who are keen to secure a home but remain mindful of their financial commitments,' said Alfredo Austria, president of DMCI Homes.
Austria said the company's top selling residences are in prime locations, designed for resort living, as well as those offering smaller and more affordable units. 'This may indicate continued strong demand for well-located, value-driven properties that align with shifting buyer preferences,' he said. 'We expect these trends to persist in 2025.'
An artist's impression of the Air Residences, a residential skyscraper being built by SM Prime's SM Development Corp. at the heart of the Makati financial district.
SM Prime—controlled by the family of late retail tycoon Henry Sy Sr.—is also optimistic demand will pick up in the second half of this year with the central bank expected to further cut interest rates, the company's president Jeffrey Lim said.
While SM Prime is pushing forward its 360-hectare reclamation development in Manila Bay, Lim said the company is also building projects outside of Metro Manila where demand remains strong.
'Demand in provincial markets continues to be healthy.'
One of the projects SM Prime will start in the second half of this year is a 200-hectare upscale residential estate in Carmona, south of Metro Manila.
'Demand in provincial markets continues to be healthy, particularly in our integrated property developments,' Lim says. SM Prime has built more than 20 mixed-use projects that integrate residential, office and hotel properties around its shopping malls.

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

What's the best age to buy a house?
What's the best age to buy a house?

Yahoo

time23 minutes ago

  • Yahoo

What's the best age to buy a house?

Buying a home is one of the biggest financial decisions you'll ever make. So, you may be wondering: What is the best age to buy a house? Are you too young to think about homeownership? Or do you feel like you've waited too long to buy? Here's a look at the average age of first-time home buyers and how to decide the right age to make a move. Learn more: A step-by-step guide to buying a house This embedded content is not available in your region. In this article: Average age to buy a house Pros and cons of buying when younger Pros and cons of buying when older Is there a 'right time' (or age) to buy? FAQs Young adults are now waiting longer to buy their first homes. In 2024, the average age for Americans to buy their first house reached a record high of 38, according to a report from the National Association of REALTORS®. The shift is largely due to soaring home prices and student loan debt levels. Many young adults are also delaying marriage and prioritizing personal growth and career development over homeownership. That said, the right age to buy a home may vary depending on your financial situation, desired location, lifestyle, and long-term goals. Building equity. Buying early and owning your own home for an extended period gives you time to build up equity. Your home equity is the difference between what your home is worth and the amount you still owe on your mortgage. You can leverage home equity to invest or meet other financial goals in the future, and even use it to afford a down payment on your next house if you move. However, you don't accumulate equity when you rent. Predictable housing costs. Annual rent increases are relatively common. But when you purchase a home with a fixed-rate mortgage, you get set monthly mortgage payments. (Note: Property taxes, homeowners insurance, and homeowners' association fees, if applicable, may fluctuate over time.) Tax perks. You can save at tax time by deducting mortgage interest, property taxes, and other home costs on your return. Homeowners who itemize deductions can take advantage of this perk. Reach out to a tax professional to learn more. Freedom of expression. Most landlords impose restrictions on the customizations you can make to rental properties. Owning a home, though, means you can renovate or upgrade your space to make it more functional. Lower price point. Home prices generally rise over time. So, buying young means you can take advantage of the lower price point. Plus, if you stay in the house for a long time, you could pay off your home loan before you retire. Limited mobility. Leasing means you only have to stay put for a year (or less in some cases) before you can relocate. But buying a home is more of a long-term investment, and selling too prematurely could be costly. Lending terms. There are loan programs for people with low or no credit scores or those with limited income, minimal cash reserves, or high debt levels. The problem is, you may not qualify for the best lending terms offered to prospective buyers. Specifically, you could get stuck paying a higher mortgage stability. Buying in your middle or older years gives you more time to build a solid financial foundation. Remember, good credit, ample reserves, and a low debt-to-income ratio make you more attractive to lenders. More clarity. It's also highly likely that you'll have more clarity on where you want to live long term when you're older. Whether you're retiring in your dream area or relocating to be closer to adult children, buying a home later in life can bring peace of mind. You'll have confidence knowing you're living exactly where you want to be. Forfeited equity growth. Again, buying young can work in your favor as home values climb. But buying older gives you less time to build up equity that you can convert to cash to use however you see fit. Mortgage payments during retirement. Some homeowners experience a significant dip in income during their golden years. Unfortunately, costly mortgage payments could stretch your budget thin. Uncertainty. There's no way to know what the future holds. You could face medical challenges or other unexpected obstacles as you age that make it difficult for you to afford or maintain your dream home. The right time to buy a home isn't always about age. It's more about your financial situation, future plans, and ability to manage homeownership costs. Here are some questions to ponder: Do you meet the lending criteria for a mortgage? Do you have a minimal debt load? Can you afford to make a down payment on a new home? Do you have at least three to six months of expenses saved for emergencies? Can you comfortably afford the monthly mortgage payments? Do you plan to live in the home for an extended period of time? Do you have the means to cover maintenance and repairs? Do you have a designated point of contact to assist with questions or address your needs? Answering yes to most of these questions is a sign that you're ready to buy a home, regardless of your age. Before moving forward, analyze your situation, needs, and goals to make an informed decision. Dig deeper: Should you buy a house? How to know if you're ready. A 2024 National Association of REALTORS® report revealed that the average age of first-time home buyers is 38. However, depending on your financial situation and goals, the right age for you could be much younger or older. Again, there's no right or wrong age to purchase a home, as it depends on your unique situation. However, most states require you to be at least 18 unless an adult signs real estate contracts on your behalf. If you're financially stable with a solid credit profile, adequate savings, and a clear vision for your future, homeownership in your 20s could be a smart financial move. You'll have several years to build equity, benefit from predictable housing costs, and even enjoy a paid-off home before retirement should you purchase your 'forever home.' Laura Grace Tarpley edited this article.

Top 5 Cities With the Worst Housing Market Outlook (3 Are in Pacific Northwest)
Top 5 Cities With the Worst Housing Market Outlook (3 Are in Pacific Northwest)

Yahoo

time32 minutes ago

  • Yahoo

Top 5 Cities With the Worst Housing Market Outlook (3 Are in Pacific Northwest)

House hunters haven't had much to cheer about the last few years, with record home values and tight inventory pricing many out of the market. That dynamic has begun to change in 2025 amid a general increase in the number of homes for sale. Find Out: Explore More: But there are still pockets of the country where finding a home remains a challenge — especially in the Pacific Northwest. In fact, that region is home to three of the five U.S. cities with the worst housing market outlook, according to a new analysis from LendingTree. LendingTree based its rankings on four key metrics: vacancy rates, housing unit approvals per 1,000 housing units, home value-to-income ratio, and annual changes in home value-to-income ratio. Low vacancy rates indicate there aren't many unoccupied homes in a particular city. This is usually a sign of heavy demand, stiff competition — and high prices. Similarly, a high home value-to-income ratio is a sign that homes are comparatively expensive. For example, a ratio of 5.0 means median home values are five times more than the median income. A ratio of 2.0 means values are only twice the median income. Here's a look at the five cities with the worst housing outlooks, per LendingTree: Vacancy rate: 4.76% Housing unit approvals per 1,000: 8.69 Home value-to-income ratio: 5.57 Change in ratio, 2022-23: 3.87% Be Aware: Vacancy rate: 4.56% Housing unit approvals per 1,000: 29.37 Home value-to-income ratio: 5.25 Change in ratio, 2022-23: 7.12% Vacancy rate: 6.70% Housing unit approvals per 1,000: 5.33 Home value-to-income ratio: 4.75 Change in ratio, 2022-23: 3.98% Vacancy rate: 6.33% Housing unit approvals per 1,000: 15.75 Home value-to-income ratio: 5.02 Change in ratio, 2022-23: 7.17% Vacancy rate: 5.31% Housing unit approvals per 1,000: 12.57 Home value-to-income ratio: 5.03 Change in ratio, 2022-23: 4.58% The main problem house hunters face in these cities is that there simply aren't enough homes available to buy, according to Matt Schulz, LendingTree's chief consumer finance analyst and author of 'Ask Questions, Save Money, Make More: How to Take Control of Your Financial Life.' 'The vacancy rates in Portland and Boise are less than half of those in many other big metros,' Schulz said in a press release. 'When that happens, prices rise, making things even more expensive. Unfortunately, this isn't likely to change in many of the most troubled metros because the data shows that insufficient building is being done.' In other parts of the country, however, market dynamics are trending in favor of buyers. Pending home sales in the U.S. decreased 6.3% in April, according to the latest data from the National Association of Realtors (NAR). A decline in sales typically means sellers have to make more concessions to buyers. 'Homebuyers in nearly every region of the country are in a better position to negotiate more favorable terms,' NAR Chief Economist Lawrence Yun said in a statement. More From GOBankingRates These Cars May Seem Expensive, but They Rarely Need Repairs This article originally appeared on Top 5 Cities With the Worst Housing Market Outlook (3 Are in Pacific Northwest) Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data

Top 5 Cities With the Worst Housing Market Outlook (3 Are in Pacific Northwest)
Top 5 Cities With the Worst Housing Market Outlook (3 Are in Pacific Northwest)

Yahoo

timean hour ago

  • Yahoo

Top 5 Cities With the Worst Housing Market Outlook (3 Are in Pacific Northwest)

House hunters haven't had much to cheer about the last few years, with record home values and tight inventory pricing many out of the market. That dynamic has begun to change in 2025 amid a general increase in the number of homes for sale. Find Out: Explore More: But there are still pockets of the country where finding a home remains a challenge — especially in the Pacific Northwest. In fact, that region is home to three of the five U.S. cities with the worst housing market outlook, according to a new analysis from LendingTree. LendingTree based its rankings on four key metrics: vacancy rates, housing unit approvals per 1,000 housing units, home value-to-income ratio, and annual changes in home value-to-income ratio. Low vacancy rates indicate there aren't many unoccupied homes in a particular city. This is usually a sign of heavy demand, stiff competition — and high prices. Similarly, a high home value-to-income ratio is a sign that homes are comparatively expensive. For example, a ratio of 5.0 means median home values are five times more than the median income. A ratio of 2.0 means values are only twice the median income. Here's a look at the five cities with the worst housing outlooks, per LendingTree: Vacancy rate: 4.76% Housing unit approvals per 1,000: 8.69 Home value-to-income ratio: 5.57 Change in ratio, 2022-23: 3.87% Be Aware: Vacancy rate: 4.56% Housing unit approvals per 1,000: 29.37 Home value-to-income ratio: 5.25 Change in ratio, 2022-23: 7.12% Vacancy rate: 6.70% Housing unit approvals per 1,000: 5.33 Home value-to-income ratio: 4.75 Change in ratio, 2022-23: 3.98% Vacancy rate: 6.33% Housing unit approvals per 1,000: 15.75 Home value-to-income ratio: 5.02 Change in ratio, 2022-23: 7.17% Vacancy rate: 5.31% Housing unit approvals per 1,000: 12.57 Home value-to-income ratio: 5.03 Change in ratio, 2022-23: 4.58% The main problem house hunters face in these cities is that there simply aren't enough homes available to buy, according to Matt Schulz, LendingTree's chief consumer finance analyst and author of 'Ask Questions, Save Money, Make More: How to Take Control of Your Financial Life.' 'The vacancy rates in Portland and Boise are less than half of those in many other big metros,' Schulz said in a press release. 'When that happens, prices rise, making things even more expensive. Unfortunately, this isn't likely to change in many of the most troubled metros because the data shows that insufficient building is being done.' In other parts of the country, however, market dynamics are trending in favor of buyers. Pending home sales in the U.S. decreased 6.3% in April, according to the latest data from the National Association of Realtors (NAR). A decline in sales typically means sellers have to make more concessions to buyers. 'Homebuyers in nearly every region of the country are in a better position to negotiate more favorable terms,' NAR Chief Economist Lawrence Yun said in a statement. More From GOBankingRates I'm a Retired Boomer: 6 Bills I Canceled This Year That Were a Waste of Money This article originally appeared on Top 5 Cities With the Worst Housing Market Outlook (3 Are in Pacific Northwest) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store