RECORD-HIGH vacancy in Metro Manila’s condominium market is expected this year as thousands of new units enter the market while unsold inventory remains elevated, according to property consultancy firm Colliers Philippines.
In its first quarter residential report, Colliers projected condominium vacancy in Metro Manila to reach 25.6 percent by end-2026, up from 24.7 percent in the first quarter.
The Bay Area is expected to post the highest vacancy level, nearing 60 percent, due to the ‘sizable turnover of new supply’ scheduled for completion by the fourth quarter.
The consultancy said nearly 13,000 condominium units are expected to be completed in 2026, almost double the 7,400 units delivered in 2025, further adding to supply pressures in the market.
The C5 Corridor is projected to account for about a third of the new supply, while substantial completions are also expected in the Bay Area.
‘Lease rates will likely remain flat in 2026. The still-elevated vacancy and substantial delivery of new units in some submarkets will likely hamper condominium rental recovery,’ the firm stated.
Colliers also noted that still-elevated mortgage rates, rising inflation-which already soared to 7.2 percent in April-and possible interest rate hikes may also delay purchases of big-ticket items like property, as buyers prioritize essential spending.
As such, the consultancy said the current market conditions may push developers to remain cautious in launching new projects.
‘In our view, developers remain cautious in launching new projects especially with the sizable unsold inventory,’ it added. Despite the supply glut, the market showed early signs of recovery in the first quarter as pre-selling condominium take-up surged 765 percent year-on-year, driven largely by economic and affordable housing segments.
Developers’ aggressive promotions and flexible payment terms, particularly for ready-for-occupancy units, helped boost demand during the quarter.
Colliers said Metro Manila’s remaining inventory life-or the estimated period needed to absorb unsold units-improved to 6.8 years from a peak of 13.4 years in mid-2025. To help improve take-up, particularly in lower-priced residential projects, Colliers said developers should continue exploring the affordable and economic housing segments while maximizing public sector-led initiatives such as the government’s Pambansang Pabahay Para sa Pilipino (4PH) housing program.
The report cited 8990 Holdings Inc.’s Urban Deca Homes Tondo as among the projects that posted significant take-up in the first quarter, offering rent-to-own studio units with monthly amortization of between P5,000 and P7,000 subsidized by Pag-IBIG under the 4PH program.
‘Colliers believes that these initiatives should help improve take-up especially for lower-priced residential units. Local governments can also take an active part in helping solve the housing backlog,’ it also said.