Condominium oversupply, geopolitical risk, and the 2028 election: an economic view
Metro Manila’s condominium market is under strain. Thousands of units remain unsold, vacancies are high, and rents in several districts are still far below their pre-pandemic levels. Some observers see structural oversupply; others argue that good location and management still set strong properties apart from weak ones.
The real question is broader: is this an ordinary real estate cycle, or a structural imbalance that global instability and the 2028 presidential election could prolong?
The evidence points to the second, but not to a crash. Metro Manila is going through a slow, uneven adjustment caused by a mismatch between the housing being built and what households can actually afford.
What the numbers show
Unsold condominium inventory stood at about 82,900 units in the second quarter of 2026, enough for 34 months of sales. By the third quarter it had dropped to about 80,000 units and 28 months, as take-up rose 17% to 8,454 units. Demand has not disappeared. But one good quarter does not clear an inventory that would still take more than two years to sell, and residential vacancy remains near 25%.
The adjustment is also uneven. Second-quarter rents compared with pre-pandemic levels:
| District | Rent (₱/sq.m./month) | Change vs. pre-pandemic |
|---|---|---|
| Bay Area / Pasay | 706 | −59% |
| Alabang / Muntinlupa | 715 | −42% |
| Ortigas / Mandaluyong | 729 | −25% |
| Makati | 887 | −18% |
| Bonifacio Global City | 1,105 | +0.1% |
| Other Taguig | 715 | +15% |
The Bay Area was hit hardest: heavy new supply, followed by the loss of tenants after the 2024 ban on offshore gaming operators (POGOs), left vacancy there near 58%. BGC, by contrast, has held its ground. There is no single Metro Manila condominium market, only district markets in very different conditions.
A housing shortage alongside unsold units
Metro Manila had a housing backlog of about 819,000 units in 2025, yet some 80,000 condominium units sit unsold. The contradiction disappears once we separate housing need from effective demand: what households are actually able to pay for at today’s prices. Developers build for the second, not the first.
The numbers make the gap plain. The median NCR family earned about ₱33,672 a month in 2023 (PSA Family Income and Expenditure Survey). Two-thirds of unsold units are priced between ₱4 million and ₱12 million. A ₱4 million unit with 20% down, a 20-year loan, and an illustrative 7% interest rate costs about ₱24,800 a month: roughly 74% of that family’s income, before dues, utilities, and taxes. A ₱12 million unit would cost more than twice the family’s entire monthly income.
Metro Manila does not have too much housing. It has too much of the wrong housing for the households that need it.
Why prices have not crashed
Real estate adjusts slowly. Developers and owners carry loans and sunk costs, and many expect a recovery, so they resist cutting list prices. The correction shows up first in other ways: longer selling periods, promotional discounts, rental concessions, and postponed launches. Watching list prices alone understates how far the adjustment has already gone.
Investor demand adds another layer. Many units were bought for rental income and capital gains, not to live in. When rents fall, returns shrink, investors stop buying, absorption slows, and rents come under further pressure. That cycle is hardest on investors who rely on rent to pay their own loans.
Good management helps individual buildings, but it mostly draws tenants from competing buildings. One property’s success is not the market’s recovery.
Global shocks and the 2028 election
The Philippines imports most of its fuel and depends heavily on remittances, so trouble abroad reaches the housing market quickly. Higher oil prices feed inflation and squeeze household budgets. Persistent inflation keeps interest rates and mortgage costs high. Conflict in host countries can hit overseas Filipino workers and the remittances that fund many home purchases. None of this adds supply; it simply weakens the demand needed to absorb the existing stock.
The May 2028 election adds domestic uncertainty. Real estate involves large, long-term commitments that are hard to reverse, so developers and investors often wait for policy direction to become clear. That waiting cuts both ways. Fewer launches would help clear the oversupply, but prolonged hesitation could slow investment and job growth. What matters is not who wins but whether economic policy stays predictable and credible.
So, will prices fall?
Three paths are possible to 2028:
- Stabilization: energy prices and inflation ease, borrowing gets cheaper, incomes rise, and the inventory is gradually absorbed.
- Prolonged adjustment: affordability stays tight and investors return slowly. Vacancies persist in oversupplied districts and effective prices drift lower in places.
- Adverse shock: a new geopolitical crisis brings higher inflation and tighter credit. Combined with forced selling by stretched investors, it produces a deeper, longer correction.
The second path is the most likely. A full collapse cannot be inferred from condominium oversupply alone. That would take widespread financial distress, heavy leverage, and forced selling across other property sectors, and the evidence for those is not there.
A correction would not be all bad. Lower rents leave tenants more to spend, more affordable units improve access to jobs, and less speculative building frees capital for productive uses. Rising prices are not proof of economic success, and falling prices are not proof of failure.
The real question is not whether Metro Manila’s property prices will fall. It is whether the coming adjustment will finally close the gap between the housing being built and the housing Filipinos can actually afford.
*Figures are from published Q2–Q3 2026 property-market research and the PSA 2023 Family Income and Expenditure Survey; the scenarios are conditional assessments, not price forecasts.
Augusto B. Agosto is an economist and a licensed real estate consultant, appraiser, and environmental planner.
