Condo Buying: Navigating Metro Manila’s 6-Year Sell-Out Period

As of 2025, Metro Manila’s condo buying continues to show resilience and adaptability, fueled by both local demand and a recovering economy. After the pandemic, demand for both residential and investment properties has picked up, with young professionals, expatriates, and investors seeking affordable and mid-range units.

Real estate developers are increasingly focusing on condo building projects that cater to different work lifestyles, with amenities that promote work-life balance, such as coworking spaces, fitness centers, and green spaces. The luxury condo segment remains strong, driven by affluent buyers and investors looking for long-term value.

Recently, Colliers Philippines, a real estate investment management firm, reported that the unsold inventory of condo units in Metro Manila reached 75,300 units in the third quarter of 2024. Colliers said in its 2025 Philippine Property Market Outlook Report that it would take around 5.8 years (or roughly 6 years) to sell all the units, which is five times longer compared to the pre-pandemic period. This 6-year sell-out period is based on factors such as current demand trends, the pace of new development, and overall market conditions.

Understanding the 6-year sell-out period is crucial for both buyers and developers as it offers valuable insights into the health and future dynamics of the residential market.

For buyers, knowing the sell-out period helps in assessing the timing of their purchase. For developers, understanding this period is essential for planning new projects and pricing strategies. Ultimately, both buyers and developers benefit from a clear understanding of this trend as it helps mitigate risks, optimize investment decisions, and navigate an ever-evolving real estate market.

If you’re in the market for a condo unit, DMCI Homes offers a wide selection of homes available for sale, for rent, and rent-to-own (RTO). DMCI’s resort-style condo communities are great options for your own home or as an investment property.

What is the 6-year sell-out period?

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A sell-out period in real estate is seen as a reflection of both the healthy absorption rate and the balancing act between new property launches and ongoing market demand. This period signifies a window where developers and investors can assess the expected turnover of existing real estate units, with demand largely driven by factors like population growth, urbanization, changing buyer preferences, and economic conditions. An analysis of past and current market conditions can also be used to assess the expected turnover.

Pandemic and postpandemic real estate trends

The global pandemic dramatically impacted the real estate market. The lockdowns, remote work arrangements, and a general economic slowdown caused a dip in demand, especially for office spaces and short-term rentals. Many real estate developers faced delays in project completions, and buyers were more cautious, shifting focus towards larger homes or properties in less densely populated areas.

As we move into 2025, the market has started to recover and adjust to new trends. There’s a stronger focus on hybrid workspaces, flexible living solutions, and sustainability. There’s also a notable shift toward suburban areas, driven by the growing interest in more spacious, affordable homes due to the rise of remote work and the need for personal space. The luxury segment remains strong, but with more emphasis on technology and smart home features.

Market analysts in the real estate sector predict that the real estate market in the Philippines is ripe with opportunities even though some sectors remain sluggish. The current real estate market in the Philippines, particularly in Metro Manila, has undergone significant changes when compared to previous years, shaped by both global and local factors.

What are the reasons behind a lengthy sell-out period?

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The lag in demand and overbuilding supply, changing buyer behavior and economic and regulatory factors significantly influence the sell-out period of real estate properties.

1. Overbuilding and oversupply

Surges in condo building projects during periods of economic growth is a notable trend in the real estate sector. Developers quickly respond to high demand by launching more condominium projects to capitalize on the favorable market conditions. These developers cater to those seeking proximity to business districts, schools, transportation hubs, and lifestyle amenities.

The surge in condo building projects is also driven by the affordability and accessibility of financing options, such as easier access to home loans and down payment schemes. However, this surge can sometimes lead to oversupply if the market doesn't absorb these units quickly enough, resulting in price corrections and longer selling cycles.

The current lag in demand for real estate properties can be hugely attributed to the changing buyer behavior postpandemic. People who experienced financial difficulties during the pandemic are spending cautiously with their priorities shifting from large purchases to saving up for future uncertainties.

Moreover, with the shift to remote work, many businesses reduced their office space requirements, leading to a drop in leasing activity.

2. Changing buyer behavior

The shift toward suburban properties and house-and-lot developments in the Philippines has become increasingly pronounced. This trend reflects changing priorities among buyers, driven by the need for more space, affordability, and the flexibility that remote work has provided.

With the flexibility of working from home, people no longer need to be tied to the office, allowing them to explore real estate options outside of the city. As remote work continues to be a long-term arrangement for many, this trend is likely to persist, shaping the future of residential real estate in the Philippines.

Financial caution is also one reason for the changing behavior among potential buyers of condo properties in the Philippines, largely due to ongoing economic uncertainties. Factors such as inflation, fluctuating interest rates, and concerns over job security have made buyers more wary about committing to significant financial investments, particularly in the real estate sector.

Many potential buyers are holding off on purchasing condos as they prioritize financial stability and savings amid the unpredictable economic climate. As a result, developers may face slower sales cycles and pressure to offer more flexible financing options or lower entry price points to attract buyers. In response to these challenges, some have started focusing on targeting end-users who are looking for more affordable options or have started to incorporate more attractive payment schemes to accommodate buyers who are more financially cautious.

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3. Economic and regulatory factors

The rising interest rates in the Philippines have had a significant impact on borrowing and purchasing power, especially for those looking to buy a condo in the Philippines. As interest rates climb, the cost of borrowing increases, which directly affects mortgage repayments. For many potential buyers, this means higher monthly payments, making condo purchases less affordable and reducing overall purchasing power.

For first-time buyers and those relying on financing, higher interest rates can significantly stretch their budgets, causing them to reconsider or delay their purchases. The increase in monthly payments can force some buyers to scale back on the type or size of the property they were considering, opting for more affordable units or even reconsidering homeownership altogether.

As a result, developers may experience slower sales as buyers become more cautious. To adapt to this environment, some developers may respond by offering more flexible payment terms or discounting units in order to maintain demand. In the long run, higher interest rates can also affect the broader real estate market, potentially slowing down price appreciation and leading to longer selling cycles.

Also, stricter lending policies by Philippine financial institutions have further impacted the condo market by making it more challenging for potential condo buyers to secure financing. These policies ensure the banks and other financial institutions that condo buyers will not default on their obligations.

Many buyers, especially first-time homebuyers, may find it hard to qualify for home loans as banks and lenders tighten their requirements with higher credit scores, larger down payments, and more stringent proof of income. This leads to a reduction in the pool of buyers able to afford condo units, slowing down sales in the market.

For developers, stricter lending policies can mean a longer sales cycle and the need to adjust their marketing strategies, offering more attractive payment terms or targeting buyers who can afford larger down payments.

What are the implications of an extended sell-out period on developers?

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An extended sell-out period has some implications on the side of real estate developers that can directly affect their business. These include the increased holding cost for unsold inventory, pressure to offer discounts, incentives, or flexible payment terms, potential slow down on projects, and the heightened need of market research and strategic planning.

1. Increased holding costs for unsold inventory

Increased holding costs for unsold inventory have become a significant concern for real estate developers in the Philippines, especially during periods of slower sales or economic uncertainty. Holding costs include expenses related to property maintenance, insurance, property taxes, utilities, and the cost of financing unsold units, all of which accumulate over time. As these costs rise, developers are under pressure to accelerate sales in order to avoid further financial strain.

For developers, these increased costs can reduce profit margins and create cash flow challenges. If inventory sits unsold for extended periods, the financial burden becomes heavier, prompting developers to reconsider their pricing strategies, offer discounts, or implement flexible payment schemes to attract buyers. In some cases, developers might also reduce the scale or scope of new projects to mitigate financial risks.

2. Pressure to offer discounts, incentives, or flexible payment terms

The pressure to offer discounts, incentives, or flexible payment terms can have a significant impact on real estate developers in the Philippines, particularly during periods of slower market demand or economic uncertainty. While these strategies are designed to boost sales and clear unsold inventory, they can also affect developers’ profitability and financial stability.

Offering discounts on condo prices, for example, can lead to reduced revenue per unit, cutting into profit margins. Although it may help move inventory more quickly, developers have to balance the immediate benefit of sales with the long-term effects on their finances. Similarly, offering incentives such as free maintenance, parking, or furnishing packages, while attractive to buyers, can further increase costs for developers, eroding their potential profits.

Flexible payment terms, such as extended payment periods or lower down payments, are often used to make properties more accessible to buyers, especially in a high-interest rate environment. However, these terms can delay cash flow for developers, making it harder to fund new projects or pay off debts. This extended payment cycle may also increase the risk of defaults if buyers face financial challenges later on.

While these strategies can stimulate short-term sales, they can also put developers under financial strain. They need to carefully assess the trade-offs between clearing inventory and maintaining a healthy profit margin. Additionally, over-reliance on discounts and incentives can also risk devaluing the property in the eyes of the market, leading to potential long-term brand and pricing challenges.

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3. Potential slowdown in launching new projects

A potential slowdown in launching new projects can have significant effects on real estate developers. Such a slowdown typically occurs during periods of economic uncertainty, tighter credit conditions, or reduced demand in the market. For developers, this pause or delay in new project launches can help mitigate the risks associated with overbuilding or market oversupply, but it also carries several financial and strategic consequences.

One immediate effect is that developers may face slower revenue growth, as they rely on the sale of new properties to generate income. A reduced pipeline of new projects could lead to a dip in sales volume and cash flow, making it harder for developers to meet financial obligations, fund ongoing developments, or pay off existing debts. For some developers, this can lead to cost-cutting measures, such as delaying construction timelines or scaling back on marketing efforts.

Additionally, a slowdown in new condo building projects can impact long-term growth. If developers are unable to launch new developments, they risk falling behind competitors who continue to introduce fresh inventory to the market. This can hurt market share and brand visibility, making it more difficult to attract investors and buyers in the future. In some cases, this may result in developers shifting focus to more affordable or smaller-scale projects in response to market demand or financial constraints.

On the positive side, a slowdown in new launches allows developers to reassess market conditions and recalibrate their strategies. It provides an opportunity to refine existing projects, focus on selling current inventory, or adjust their pricing and payment schemes to align better with buyer expectations.

4. Importance of market research and strategic project planning

Market research and strategic project planning are crucial for real estate developers especially in a dynamic and often unpredictable market. Effective market research helps developers understand key factors such as demand trends, buyer preferences, location attractiveness, and economic conditions. This insight allows developers to make informed decisions about which types of properties to build, where to build them, and what price points will resonate with potential buyers.

Strategic project planning goes hand-in-hand with market research, helping developers set clear goals, timelines, and budgets for each development. This planning ensures that resources are allocated efficiently, risks are mitigated, and projects are completed on schedule. In times of market uncertainty, having a well-thought-out strategy allows developers to adapt quickly whether that means adjusting project size, offering flexible payment terms, or reevaluating pricing.

Moreover, strategic planning helps anticipate challenges such as potential slowdowns in sales or higher construction costs, providing developers with proactive solutions to avoid financial strain. It also aligns project timelines with market demand, ensuring that developers don’t face a glut of unsold inventory or end up with properties that are no longer in demand.

What are the implications of an extended sell-out period on buyers?

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Condo buyers can also be affected in the event of an extended sell out period. However, these implications on the part of condo buyers are not the same with real estate developers.

1. Opportunities to negotiate for better deals, discounts, or favorable terms

When there is an extended sell-out period, buyers often find opportunities to negotiate better deals, discounts, or more favorable terms from developers. Extended sell-out periods typically indicate that developers have unsold inventory and may be motivated to close deals more quickly to reduce holding costs, such as maintenance, taxes, and financing expenses. This creates leverage for buyers to negotiate more favorable terms.

Developers may be more willing to offer discounts or price reductions of condo prices to attract buyers and move inventory. These discounts can vary depending on the market segment and the length of time a property has been on the market, but buyers may find that they can secure a unit at a lower price than initially advertised.

Flexible payment terms are another point of negotiation. Developers who are eager to close sales may offer extended payment plans, reduced down payments, or more lenient financing options to make the property more accessible to potential buyers.

For investors, an extended sell-out period can present the opportunity to negotiate for better rental guarantees or higher yields, as developers may seek to attract investors to help stabilize the market for the property.

Overall, buyers can take advantage of a slow sell-out period to secure more favorable terms and potentially get more value for their money. However, the negotiation process requires market knowledge, timing, and a clear understanding of the developer’s situation and motivations.

2. Risks of buying into oversupplied developments

Buying into oversupplied condo developments during an extended sell-out period carries several risks for potential condo buyers. When a market is saturated with unsold inventory, it usually signals that demand is not keeping up with supply. This can lead to a decline in property values, as the market becomes flooded with options, which could result in slower capital appreciation or even price corrections in the future. Buyers may struggle to sell or rent out their units in the face of stiff competition from other similar properties, making it harder to realize returns on investment.

Another risk is the potential for poor liquidity. If there are many unsold units in the same development or nearby developments, the resale value may be lower than initially expected, and buyers could face difficulties finding buyers when they decide to sell. In some cases, developers may also lower their prices further to clear out remaining inventory, which could make the buyer's investment less valuable over time.

Overall, buying into oversupplied condo developments during an extended sell-out period carries the risk of lower returns, reduced resale value, and potentially less desirable living environments, making it crucial for buyers to carefully evaluate the market conditions and long-term prospects of the development before committing.

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Tips for identifying properties with strong long-term investment potential

As a potential condo buyer, you can take advantage of the sell-out period for reasons explained earlier. Here are some condo buying tips in choosing the right property:

1. Put priority in the location. One of the most critical factors for long-term investment is the property’s location. Areas with ongoing or planned infrastructure developments, such as new transportation hubs, roads, and commercial centers, tend to see long-term value appreciation. Proximity to key business districts, universities, and lifestyle amenities (like malls and hospitals) can also ensure sustained demand for the property, even during slower market periods.
2. Assess the reputation of the developer. Developers with a history of delivering quality projects on time, maintaining properties well, and managing their communities effectively are more likely to maintain or increase the property’s value over time. Researching the developer’s financial stability and project completion history is crucial for minimizing risk.
3. Choose a condo with quality amenities. Focus on properties that offer unique or premium features, such as sustainable building designs, smart home technology, and attractive amenities like fitness centers or green spaces. These features can make a condo stand out in the long run, appealing to tenants and buyers who value quality living.
4. Stay on the loop on market trends. Even in a market with an extended sell-out period, looking at long-term trends is important. Keep an eye on emerging growth areas or shifts in demographic trends. Suburban or satellite cities are becoming increasingly attractive due to improved infrastructure and remote work trends. Properties in these areas may offer more room for appreciation over time.
5. Research on rentability and demand. Assess the rentability of the property by considering factors like local job markets, proximity to business hubs, and the area’s potential for future development. Properties in high-demand locations with a history of strong rental yields are likely to maintain their attractiveness as investment options.
6. Study the pricing and terms. In a market with slower sales, developers may offer flexible payment schemes or discounts. Buyers should take advantage of these offers to lock in a better deal. However, it’s important to balance the short-term discounts with long-term value potential. Avoid rushing into deals based solely on immediate price cuts and instead focus on overall long-term growth prospects.

By carefully evaluating these factors, condo buyers can identify properties with strong long-term investment potential, even in a challenging market with an extended sell-out period. Taking a thoughtful, research-driven approach can help secure an investment that will continue to grow in value over time.

Key takeaways

As of 2024, it could take six years for developers to sell all their inventory of condo units in Metro Manila. This sell-out period can pose challenges for developers, investors and buyers. Here are ways on how you could use this period to your advantage:

• Search for opportunities to negotiate for better deals. Extended sell-out periods typically indicate that developers have unsold inventory and may be motivated to close deals more quickly to reduce holding costs, such as maintenance, taxes, and financing expenses. This creates leverage for buyers to negotiate more favorable terms.
• Choose among a wide selection of premier condo options. A slowdown in new launches provides an opportunity for developers to refine existing projects, focus on selling current inventory, or adjust their pricing and payment schemes to align better with buyer expectations. You have a lot of options for affordable units.
• Assess your buying decision well. With more time to research, you can assess the best property types, locations, and developers to invest in, ensuring you make a well-informed decision in buying a condo.

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