Metro Manila residential vacancy seen to decline in 2026
Residential vacancy in Metro Manila is expected to ease by next year as developers limit new supply to the market, according to Colliers Philippines.
Joey Bondoc, research head at Colliers, on Wednesday said overall vacancy in the National Capital Region had reached 24.5 percent as of the second quarter.
While this is projected to inch up to 25.8 percent by the end of this year, it is seen to drop to 25.3 percent next year, and further to 23.4 percent in 2027.
“Primarily it is because of the limited supply, meaning less completion in the Metro Manila condominium market,” Bondoc said during a briefing. “The good news is we’re likely to see a faster takeup of these condominium units, therefore resulting in a much lower vacancy.”
Data from Colliers shows that as of the second quarter, developers launched 1,400 condominium units, a significant slide from 5,300 units in the first quarter.
Colliers expects developers to complete 8,600 new units this year, up from 7,800 units in 2024.
However, delivery is seen to decline to 6,200 units next year and further to 2,500 units in 2027.
For Colliers managing director Richard Raymundo, aggressive promotions and discounts were also the main drivers of the vacancy decline.
“The promos that were instituted in the last quarter worked because we haven’t seen promos as aggressive as this,” Raymundo said.
According to Colliers, some developers offered discounts as high as 50 percent of the total unit price for spot cash payments, or those paying immediately in full.
Raymundo pointed out that discounts were only at 10 percent before the condominium glut.
“It seems to be working because we’re seeing that the back-outs have gone down,” he noted.
Back-outs, or canceled purchases, had gone down by 25 percent to 3,600 units in the second quarter versus the first, Colliers reported.
As of the second quarter, there were around 30,500 ready-for-occupancy units that remained unsold in Metro Manila. The upscale and luxury segments (those priced at P12 million to more than P20 million) accounted for only 10 percent of the total, while lower middle-income (P3.6 million to P6.99 million) and upper middle-income (P7 million to P11.99 million) accounted for 32 percent and 14 percent, respectively.
“[Developers] are looking at which segment will be more attractive to the market, and right now, it appears that the upscale and luxury segments remain well-performing and, in fact, are a cut above the rest,” Bondoc said.
More developers have recently entered the luxury condominium market, including Megaworld Corp. via its Signature Collection, and SM Prime Holdings Inc. through Signature Series under the SM Residences brand.
