Philippine Condo Market: Is There a Real Estate Bubble?

In recent months, speculation about a potential real estate bubble in the Philippine condominium market has gained traction. Analysts, investors, and property owners alike have debated whether Metro Manila’s condo sector is heading for a major correction or if concerns are overblown.

Industry reports from Colliers Philippines and Leechiu Property Consultants provide a nuanced picture of the market. While certain segments show signs of oversupply and price stagnation, others—particularly the luxury and high-end markets—continue to thrive. The question remains: Is the Philippine condo market in trouble, or is it merely undergoing a natural adjustment?

Assessing the Market: Are We in a Bubble?

A real estate bubble occurs when property prices escalate beyond sustainable levels due to speculation, followed by a sharp price correction when demand weakens. However, not all price slowdowns indicate a bubble burst.

According to Colliers Philippines, Metro Manila’s residential vacancy rate reached 17.6% by late 2024, an increase from 16.6% in 2023. This figure signals rising supply exceeding immediate demand, particularly in the mid-range and affordable condo markets.

Despite these concerns, the luxury real estate sector remains resilient. Leechiu Property Consultants noted that pre-sales for high-end developments in Makati, BGC, and Ortigas have remained strong, with investors quickly acquiring premium units. David Leechiu, CEO of the firm, stated in a BusinessWorld interview that while some sectors face challenges, “there is no crash happening in the premium market. If anything, the appetite for high-value real estate has never been stronger.”

The disparity between mid-range and high-end condo performance suggests that while there may be pockets of oversupply, the broader market is not on the verge of collapse.

The Forces Shaping the Condo Market

1. Resilient Demand for Luxury Developments

In stark contrast to concerns about a slowdown, Metro Manila’s luxury condo sector continues to perform exceptionally well. High-net-worth individuals and foreign investors have sustained demand, particularly for developments in Makati, BGC, and Rockwell.

• Prime location scarcity – Real estate in central business districts remains highly sought after due to proximity to offices, commercial hubs, and lifestyle centers.
• Real estate as an inflation hedge – Investors continue to see property as a stable store of value amid currency fluctuations and inflationary concerns.
• Low supply of ultra-luxury units – Unlike mid-range condos, high-end projects are limited in number and face consistent demand from elite buyers.

2. Oversupply Challenges in the Mid-Market

While luxury projects continue to command record prices, the same cannot be said for mid-range developments. Over the past five years, developers have launched a substantial number of affordable to mid-tier condos, targeting the growing middle class. However, rental yields have softened in some areas, with vacancy rates rising in parts of Quezon City, Manila, and Las Piñas.

3. The Role of Infrastructure Development

One factor that complicates the discussion of a bubble is the impact of upcoming infrastructure projects. Major developments such as the Metro Manila Subway and North-South Commuter Railway are expected to drive long-term property appreciation in strategically located areas.

For Condo Owners: Should You Sell or Hold?

• If your unit is in a high-demand area like Makati, BGC, or Rockwell, holding on to your investment may yield higher long-term appreciation.
• If your property is in a high-vacancy district, selling might be a better option before prices plateau.

For Investors: Should You Buy a Condo in 2025?

• High-end and luxury properties remain solid investments. Investors looking for stability should focus on premium developments.
• Pre-selling units offer opportunities. Buying during pre-selling stages often yields the best appreciation potential.

For First-Time Buyers: Should You Buy a Condo Now?

First-time buyers considering a condo purchase should weigh market conditions, developer offers, and personal financial readiness.

• Developers are offering competitive deals, including flexible down payments and discounts.
• Infrastructure growth could boost future values, making strategic purchases in transit-oriented areas beneficial.

Final Thoughts: Is There a Condo Bubble?

The reality of the Philippine condo market is more nuanced than a simple yes or no. While certain segments, particularly the mid-range market, are seeing rising vacancies, this does not constitute a full-scale bubble.

The luxury sector remains strong, driven by high-net-worth buyers, foreign investment, and a scarcity of premium developments. Infrastructure expansion continues to fuel long-term appreciation in key areas.

Rather than a broad “bubble burst,” the Philippine condo market is experiencing a segmented adjustment, with mid-range investors needing to reassess their strategy, while luxury real estate continues to thrive.

If you’re considering your next move in the real estate market, contact us for expert guidance.